2024-09-12 11:05

LONDON, Sept 12 (Reuters) - Grangemouth, Scotland's only oil refinery, is to close in 2025 with the loss of 400 jobs, operator Petroineos said on Thursday, as part of plans to turn the 100-year old plant into a fuels import terminal. Petroineos said last November it was preparing to shut Grangemouth, Britain's oldest refinery. Production will cease in the second quarter of next year, subject to an employee consultation, a company spokesperson said. The decision was criticised by trade unions and politicians. "It is deeply disappointing that Petroineos have confirmed their previous decision to close Grangemouth oil refinery," UK Energy Secretary Ed Miliband said. The site will become an import and distribution terminal for finished fuels, which will cut the number of employees at the site from 475 to around 75 over the next two years. Petroineos is a joint venture between PetroChina International London (PCIL) and INEOS Group, a British chemicals firm founded by billionaire Sir Jim Ratcliffe. The company cited economic difficulties as the reason for the closure, stating that the company had invested $1.2 billion since 2011, and returned losses in excess of $775 million over the same period. "Grangemouth is increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa. Due to its size and configuration, Grangemouth incurs high levels of capital expenditure each year just to maintain its licence to operate," the company said. It said the plant is currently losing around $500,000 per day, and expects to see a $200 million loss for 2024. Petroineos's plans for Grangemouth had been opposed by trade unions and local politicians and there were campaigns to extend production until a low-carbon alternative for its long-term future could be secured. The UK and Scottish governments announced a joint plan on Thursday, including a 100 million pound ($130.43 million) financial package, to secure an industrial future for Grangemouth after the refinery closes. This will go towards career support for affected workers as well as investments in local energy projects. "We are announcing a package of investment to help the workforce find good, alternative jobs, invest in the community and serve a viable industrial future for the Grangemouth site," Miliband said. Trade union Unite, which represents workers at Grangemouth, described the closure as an "act of industrial vandalism." "The complex is critical to the nation’s manufacturing base and energy security," Unite Scottish secretary Derek Thomson said. SHRINKING MARKET Frank Demay, chief executive of Petroineos Refining, said demand for the fuels produced at Grangemouth had already started to decline. "With a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further," he said. The refinery processes mainly North Sea Forties crude oil, which it has a direct link to via the Forties Pipeline System (FPS), and U.S. WTI Midland. Both of those crude oil grades help to underpin the Brent global oil benchmark, meaning the refinery's closure could have wider significance for the oil market. Ineos said it is "business as usual" for its other operations around the Grangemouth site, namely the Ineos Olefins and Polymers petrochemical plant and the FPS. The new Labour government has previously committed funding to look into possible low-carbon projects at the site. The research has identified three possible long-term options, including low-carbon hydrogen, clean eFuels and sustainable aviation fuels. Unite said it is in talks with the government about the site, including the potential for sustainable aviation fuel production. ($1 = 0.7667 pounds) Sign up here. https://www.reuters.com/markets/commodities/scotlands-grangemouth-oil-refinery-close-2025-400-jobs-go-2024-09-12/

2024-09-12 10:59

Yagi disrupts infrastructure, power supply LG Electronics, Jinko Solar among companies hit Many expect to resume some activity soon, some need longer Flooding hits goods ready for export to US, EU HANOI, Sept 11 (Reuters) - Typhoon Yagi caused severe damage to many factories and flooded warehouses in northern Vietnam's export-oriented industrial hubs, with some shuttered plants expected to need weeks to return to full operation, executives said. Asia's strongest typhoon this year was still causing deadly floods and landslides on Wednesday, killing dozens and ravaging infrastructure such as power networks and roads, after it hit the coast on the weekend. The disruptions could affect global supply chains as Vietnam hosts large operations of multinationals that mostly export their products to the United States, Europe and other developed countries. "Many of them are gone with the wind," said Calvin Nguyen, head of Vietnamese logistics firm WeDo Forwarding Co., referring to products that were to have been delivered to the United States and the European Union, but without saying which. The company's three warehouses in the coastal city of Haiphong had their roofs blown off and were still flooded on Wednesday, he said. The industry ministry did not reply to a request for comment. In Haiphong, one of the areas worst hit by the typhoon, 95% of businesses had been expected to resume some activity by Tuesday, the body managing its industrial zones said. "Many businesses had their roofs blown off, some walls collapsed, gates, fences, signs, camera systems, garages and sliding metal doors were overturned, water flooded into factories," it said on its website. In industrial zones hosting factories in Haiphong and the neighbouring province of Quang Ninh, 20 of 150 investors' plants will be out of service for at least a few weeks, said Bruno Jaspaert, head of the zones. He expected power consumption there to stay a third below normal for weeks or months, as many companies were busy rebuilding damaged factories, he said, citing a damage survey. Among those hit was Jupiter Logistics, part of a group co-owned by Japan Airlines Co Ltd (9201.T) , opens new tab, said one official familiar with the survey. Damage to Jupiter's warehouse was minor, a spokesperson for JAL said on Thursday, noting the cargo stored there had to be moved to a different location. In another industrial park in Haiphong, South Korea's LG Electronics (066570.KS) , opens new tab said it had partly resumed work on Tuesday after a factory's walls were crushed on Saturday and a warehouse of refrigerators and washing machines was flooded. POWER CUTS As state-owned power distributor EVN works to restore dozens of damaged electricity lines, power outages are still crippling several areas in the north. In Quang Ninh, north of Haiphong, many factories still lacked electricity or water, Jaspaert said. Chinese solar panel maker Jinko Solar's (688223.SS) , opens new tab factory there was severely damaged, one of its workers said, as windows had been smashed and the roof blown away, keeping work from being resumed on Tuesday. Jinko officials were not immediately available to comment. Far from the coast, the industrial hubs of Thai Nguyen and Bac Giang, home to large factories of multinationals, such as Samsung Electronics (005930.KS) , opens new tab and Apple (AAPL.O) , opens new tab supplier Foxconn (005930.KS) , opens new tab, also faced the risk of floods. However, a Reuters witness said there were no signs of flooding on Wednesday at Samsung's large facilities in Thai Nguyen, about 60 km (37 miles) north of Hanoi, as water was receding, though more rain was expected. Sign up here. https://www.reuters.com/world/asia-pacific/factories-vietnams-export-hubs-face-weeks-disruption-after-typhoon-2024-09-11/

2024-09-12 10:57

TSX ends up 1.1% at 23,475.14 Index posts an all-time closing high Materials group jumps 4.1% as gold rises Price of oil settles 2.5% higher Sept 12 (Reuters) - Canada's main stock index rose to a record high on Thursday as higher gold prices boosted metal mining shares and investors grew confident of a "soft landing" for the economy. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended up 263.97 points, or 1.1%, at 23,475.14, moving past the record closing high it posted on Aug. 26. "The TSX is firing on all cylinders today," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth. "The materials group is leading the charge ... led by the precious metals miners. I think investors are finally waking up to this stealth rally in gold and silver." The price of gold rose 1.8%, increasing its gain since the beginning of the year to 24%, while the materials sector, which includes metal mining shares and fertilizer companies, jumped 4.1%. "We have seen concerted buying both sides of the border this week. That would indicate that investors are quite confident about the U.S. soft landing scenario playing out," Picardo said. Wall Street's main indexes also rose ahead of the expected start of Federal Reserve interest rate cuts next week. All ten major sectors on the TSX ended higher, with industrials adding 1.1% and energy up 0.8%. U.S. crude futures settled 2.5% higher at $68.97 a barrel as producers assessed the impact on output in the U.S. Gulf of Mexico after Hurricane Francine tore through offshore oil-producing areas. Air Canada (AC.TO) , opens new tab said that the federal Canadian government should be prepared to intervene to prevent a looming pilots' strike that the carrier said could cause disruption for weeks to come. Shares of the airline rose 1.9%. Sign up here. https://www.reuters.com/markets/tsx-futures-rise-higher-oil-prices-2024-09-12/

2024-09-12 10:38

MUMBAI, Sept 12 (Reuters) - Indian investors should prioritize receiving bets on overnight indexed swaps over taking fresh long positions in bonds as potential gains from OIS are expected to outperform bonds once the global rate-cut cycle begins, a BNP Paribas official said. Interest rates have remained elevated globally as many countries prioritize inflation management. However, they now stand on the verge of an easing cycle. The US Federal Reserve is almost certainly expected to cut rates at its meeting next week. "The INR swaps rally more in policy a rate cutting cycle and outperform versus bonds as we have seen historically," Chandresh Jain, Asia rate and FX strategist, global markets at BNP Paribas told Reuters on Thursday. "Additionally, the market already has long bond positions, so bonds will underperform in rallies now," he added. India's five-year OIS rate stands at around 5.98%, while the 10-year benchmark 7.10% 2034 bond yield is at 6.82%, a spread of over 80 basis points. The five-year OIS rate has eased over 40 bps since the start of this quarter, while the 10-year bond yield has declined by 18 bps in the same period. Jain anticipates that bond yields and swap rates will decline further; however, a widening of spreads is expected, potentially reaching 90-95 basis points over the next three months. Markets have currently priced in an aggregate of 175 bps of easing by the Fed in the next six months, but Jain expects the central bank to deliver five rate cuts of 25 basis points each till March. He expects the Reserve Bank of India to cut rates by only 50 bps during the same period, adding that though he found receiving outright Indian OIS attractive, he would suggest waiting "for a better entry level". Sign up here. https://www.reuters.com/markets/rates-bonds/receiving-swaps-get-more-profitable-than-adding-bonds-india-bnp-paribas-exec-2024-09-12/

2024-09-12 10:22

MUMBAI, Sept 12 (Reuters) - The Indian rupee ended nearly flat on Thursday, with intervention by the Reserve Bank of India helping to stabilize the currency despite a broader decline among most Asian peers. The rupee closed at 83.9650 against the U.S. dollar, nearly unchanged from its close at 83.9775 in the previous session. The rupee traded within a narrow range of less than 2 paisa throughout the day, as dollar outflows and a dip in peer currencies applied pressure. This was offset by dollar sales from state-run banks, likely acting on behalf of the RBI, traders said. While there is "sufficient and more," dollar demand to push the rupee below 84, the RBI doesn't seem open to allowing that, a foreign exchange trader at a state-run bank said. Till that changes, the rupee is expected to trade sideways within the 83.90-83.98 range, the trader added. Last week, the currency touched an all-time low of 83.9850. The dollar index was flat at 101.7 while US bond yields rose after consumer inflation data released on Wednesday dampened hopes of a 50-basis point rate cut by the Federal Reserve next week. Focus will be on the European Central Bank's policy decision due later in the day alongside US jobless claims and wholesale inflation data. "With lingering concerns about a sharp deterioration of the jobs market, a significant downside surprise could persuade markets that a 50bp cut in September is still a possibility," ING Bank said in a note. Meanwhile, benchmark Indian equity indices, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab rose to record highs before ending the session higher by 1.7% and 1.9%, respectively. India's consumer inflation data is due later on Thursday as well and is expected to show that CPI held below the RBI's 4.0% medium-term target for a second month in August, according to a Reuters poll. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-flat-rbi-intervention-offsets-pressure-weak-asia-fx-2024-09-12/

2024-09-12 10:15

LONDON, Sept 12 (Reuters) - The British pound was steady on Thursday after hitting a three-week low against the dollar the day before after data showed the UK economy stagnated in July, while focus turned to next week's key inflation print and central bank meeting. Sterling was little changed on the day at $1.3052 and trading in a tight range, just above the $1.30025 it reached on Wednesday, its lowest since Aug 20. Data on Wednesday from Britain's Office for National Statistics showed no change in economic output in July. A Reuters poll of economists had forecast a 0.2% month-on-month expansion. But while growth has stalled in Britain in recent months, the economy has still shown more robust growth than the euro zone since the beginning of the year. "If we look at the PMIs (purchasing managers' indexes), we continue to see downside surprises for the euro area whereas you look at Britain and there are continued top side surprises," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank. Against the euro , the pound was also little changed at 84.4 pence before today's European Central Bank (ECB)interest rate decision, where a quarter-point rate cut is widely expected. Meanwhile, the Bank of England meets next week, and futures markets imply around an 80% chance that interest rates remain on hold, after a 25 basis point rate cut in August. "I think they will only deliver one more cut this year," Danske Bank's Kundby-Nielsen added. "That will play an important role and is set to support the pound," she added, as the ECB and Federal Reserve look set to lower interest rates more aggressively. The next key input for the BoE will be Wednesday's inflation data, released the day before its policy announcement. UBS analysts believe headline inflation will remain steady at 2.2% but volatile components could lead to a pick-up in services inflation to 5.5%. "We think the latest inflation prints should not have a significant impact on the MPC's assessment of the inflation outlook," UBS said, referencing the BoE's monetary policy committee. "Against this backdrop, we expect the majority of the MPC to vote in favour of keeping rates on hold next week with a 7-2 vote split." Sign up here. https://www.reuters.com/markets/currencies/sterling-steady-with-key-tests-come-2024-09-12/