China’s Country Garden Has ‘Given Debt Rejig Plan to Creditors’
November 18, 2024
Sources say the country’s biggest developer has given a revised debt-restructuring plan to some foreign creditors; it had total debt of close to $190 billion last year
China’s biggest developer, Country Garden, submitted preliminary terms of an offshore debt rejig plan to some creditors late in October, multiple sources have told Reuters.
The debt-laden property giant, which defaulted on $11 billion in foreign bonds late last year, is battling to avoid liquidation. It was said to have about a million unfinished homes and total debt of close to $190 billion.
The proposal includes a revised cashflow projection, according to two of the sources who have direct knowledge and another person familiar with the matter. That is a standard item for a debt restructuring process to show to creditors the firm’s ability to meet its obligations.
Weaker cashflow seen
The projection shows the developer expects a weaker cash flow in coming years, compared with the estimates it had shared with some offshore creditors earlier in 2024, two of the sources said.
Details of the cash flow projection were not immediately known. A spokesperson for Country Garden did not respond to Reuters’ request for comment.
The sources declined to be identified, as they were not authorised to speak to the media.
Once China’s biggest developer, Country Garden defaulted on its $11 billion in offshore bonds late in 2023 and is fighting a liquidation petition in Hong Kong. The next court hearing has been set for January 20, 2025.
Country Garden’s downward revision of the cashflow outlook comes after the government rolled out a raft of measures over the past year to revive the property sector, which has slumped in recent years as developers succumbed to a mountain of debt.
Little impact from support measures
China’s new home prices fell the most year-on-year in October since 2015, while property investment declined 10.3% in the first 10 months of 2024, official data showed on November 15, suggesting the support measures have had little impact so far.
The Finance Ministry last week introduced new tax incentives to further lower the cost of home purchases and spur demand – its latest support effort. China also cut benchmark lending rates by 25 basis points in October to try to boost demand.
At a hearing in July, Country Garden told the Hong Kong High Court that it expected to publish the term sheets for a revamp of its offshore debt to creditors in September and that it planned to seek approval from the court on that arrangement early in 2025. It missed the September deadline.
Talks on ‘haircuts by bondholders’
If Country Garden can gain support from its key creditors for the restructuring proposal before the January court hearing, it would pave the way for the company to seek more time from the court to implement a restructuring plan.
PJT Partners, a financial adviser representing the main group of Country Garden’s offshore bond holders for the debt restructuring talks, declined to comment.
Ever Credit, a unit of Hong Kong-listed Kingboard Holdings, filed the liquidation petition against Country Garden in February for non-payment of a $205 million loan.
Country Garden and some of its offshore creditors have, in recent weeks, actively discussed a restructuring framework that covers potential haircuts that the bond holders will have to take and a debt-to-equity swap, according to one of the sources.
Its shares have been suspended from trading since April pending the release of 2023 full-year and 2024 interim results. In an exchange filing in November, Country Garden said contracted sales for October fell 31% to around 4.33 billion yuan.
Many Chinese property developers have defaulted since the sector slipped into a debt crisis in mid-2021, resulting in millions of uncompleted homes across the country.
Some are facing liquidation lawsuits filed by creditors, with the latest being state-backed Sino-Ocean Group. A handful, including sector giant China Evergrande Group, have been ordered to be liquidated.
https://www.asiafinancial.com/chinas-country-garden-has-given-debt-rejig-plan-to-creditors
India and Nigeria Strengthen Maritime Security Ties
India and Nigeria recently agreed to enhance cooperation in maritime security, which occurred during Prime Minister Narendra Modi’s state visit to Nigeria. It marked the first visit by an Indian Prime Minister in 17 years. President Bola Tinubu invited Modi to discuss various collaborative efforts.
Key Discussions
Modi and Tinubu met at the presidential villa in Abuja. They discussed topics such as economic development, defence, healthcare, and food security. Both leaders expressed a commitment to encouraging bilateral relations.
Maritime Security Focus
The Gulf of Guinea and the Indian Ocean face increasing threats. India and Nigeria agreed to take coordinated action against piracy. They aim to safeguard vital maritime trade routes. This collaboration is crucial for both nations’ economic interests.
Nigeria seeks to attract more Indian investments. The country is also looking for affordable lines of credit. These efforts aim to boost Nigeria’s economy and create job opportunities.
Investment Pledges
During the G20 summit last year, Nigeria secured nearly $14 billion in investment pledges from Indian investors. Jindal Steel and Power committed $3 billion to Nigeria’s steel sector. This investment marks India’s growing economic interest in Nigeria.
Indian Presence in Nigeria
Over 200 Indian companies currently operate in Nigeria. These companies contribute to various sectors, including manufacturing and services. Their presence supports Nigeria’s economic development and job creation.
The collaboration between India and Nigeria is poised for growth. Both countries recognise the importance of partnership in addressing common challenges. Continued dialogue will likely lead to further agreements in various sectors.
https://www.gktoday.in/india-and-nigeria-strengthen-maritime-security-ties/
The U.S. Energy Department's latest inventory report showed a lower-than-expected increase in natural gas supplies. Following this positive data, futures ended the week 6% higher.
However, natural gas is expected to remain volatile, depending on the weather outlook, supply/demand balance etc. In such a situation, investors should focus on resilient stocks like Cheniere Energy (LNG Quick QuoteLNG - Free Report) , Range Resources (RRC) and Shell plc (SHEL).
Natural Gas Build Smaller Than Market Expectations
Stockpiles held in underground storage in the lower 48 states rose 42 billion cubic feet (Bcf) for the week ended Nov. 8, below analysts’ guidance of a 44 Bcf addition. The increase compared with the five-year (2019-2023) average net injection of 29 Bcf and last year’s growth of 41 Bcf for the reported week.
The weekly build put total natural gas stocks at 3,974 Bcf, 158 Bcf (4.1%) above the 2023 level and 228 Bcf (6.1%) higher than the five-year average.
The total supply of natural gas averaged 107.5 Bcf per day, down 0.3 Bcf per day on a weekly basis, due to lower dry production partly offset by higher shipments from Canada.
Meanwhile, daily consumption rose to 106.9 Bcf from 101.4 Bcf in the previous week, mainly reflecting higher residential/commercial usage and an increase in deliveries to U.S. LNG export facilities.
Natural Gas Prices Finish Higher
Natural gas prices rose last week following a smaller-than-expected inventory build. December futures closed at $2.823 on the New York Mercantile Exchange, marking a 5.8% increase.
However, even with this gain, one has to consider the current natural gas supply surplus and the lingering uncertainty associated with it. With current inventories remaining above both last year’s levels and the five-year average, the rally can be short-lived. The relatively mild weather and demand for light heating are other factors to contend with. Investors must remember that natural gas prices dipped to a four-month low of $1.88 in late August, underscoring the market's ongoing volatility.
How Should Investors Play Natural Gas Stocks?
The natural gas market continues to struggle with oversupply, along with shifts in weather and production dynamics. As such, investors should remain cautious. Focusing on fundamentally strong stocks like Cheniere Energy, Range Resources and Shell plc —each carrying a Zacks Rank #3 (Hold) — may offer more stability amid the uncertainty.
Cheniere Energy: Being the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, Cheniere Energy enjoys a distinct competitive advantage.
Cheniere Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. The natural gas exporter has a trailing four-quarter earnings surprise of roughly 87.5%, on average. LNG shares have moved up 22.2% in a year.
Range Resources: The company is an U.S. independent natural gas producer with operations focused in the Appalachian Basin. Range Resources’ large contiguous acreage position provides more than 30 years of low-breakeven, high-return inventory. The company produced 202.8 Bcfe from these assets in the third quarter of 2024 — 68% natural gas.
Range Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The upstream operator has a trailing four-quarter earnings surprise of roughly 28.8%, on average. RRC shares have edged up 0.5% in a year.
Shell: Shell’s long-term strategy revolves around LNG. This London-based firm bought BG Group for $50 billion in 2016 to become the world’s largest producer and shipper of LNG. With LNG export demand likely to rise significantly in the near-to-medium term, Shell’s position as a major supplier should help it meet the fuel’s growing demand.
SHEL beat the Zacks Consensus Estimate for earnings in each of the last four quarters. This natural gas exporter has a trailing four-quarter earnings surprise of roughly 15.4%, on average. Shell shares have lost 1.8% in a year.
https://www.zacks.com/stock/news/2371715/natural-gas-gains-for-the-week-but-remains-well-supplied
By Christian Moess Laursen
Saudi Arabia's national oil company, Aramco, and Chinese oil-and-gas giant Sinopec started building a refining and petrochemical complex in China's southeastern Fujian province, as Aramco continues to expand its downstream portfolio in the country.
The companies said in a joint statement Monday that the facility is planned to have a refining unit with capacity for 320,000 barrels a day, an ethylene unit that can produce 1.5 million metric tons a year, a 2-million-ton paraxylene facility and a 300,000-ton crude-oil terminal. Paraxylene is a feedstock to manufacture other industrial chemicals.
Part of the company's strategy is to expand its downstream business in what it calls high-growth geographies such as China, India and Southeast Asia. Aramco aims to supply more than one million barrels of crude oil a day to advanced chemical processing facilities in China.
In recent years, Aramco has been active in acquiring stakes in Chinese petrochemical companies. Last year, it signed a preliminary agreement to buy a stake in Shandong Yulong Petrochemical and bought a 10% stake in Rongsheng Petrochemical, while it is currently in discussions to acquire a 10% stake in the petrochemical unit of China's Hengli Group.
In addition, Aramco signed last month a framework pact with Vietnam's oil and gas company Petrovietnam to collaborate on storage, supply and trading of energy and petrochemical products.
Aramco had a net chemicals production capacity of 59.6 million tons a year as at Dec. 31, 2023.
Fujian Petrochemical--a joint venture between Sinopec and Fujian Petrochemical Industrial Group--will own a 50% stake in the new complex, with Aramco and Sinopec each taking a 25% stake.
The project is expected to be fully operational by the end of 2030. Sinopec and Aramco signed a preliminary agreement to build the complex two years ago.
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
11-18-24 0729ET
President-elect Donald Trump routinely led supporters in chants of ‘drill, baby, drill’ on the campaign trail, promising to free U.S. energy from political and regulatory shackles holding back the industry.
But wildcatting legend Harold Hamm, executive chairman of Continental Resources and a major Trump donor, says the U.S. faces legitimate challenges to expanding production growth, even under a second Trump presidency.
“People think that we’re going to raise [production] 3 [MMbbl/d] to 4 [MMbbl/d],” Hamm said in an interview with Hart Energy. “But in my opinion, from a geologist’s perspective, you’re not going to see that.”
A more realistic trajectory would be raising U.S. output between 1 MMbbl/d to 2 MMbbl/d over the next five to six years, driven almost entirely by gains from the Permian Basin, Hamm said.
Hamm does argue that D.C. regulation stymies the day-to-day business of the oil and gas industry. He wants to see a laundry list of changes when Republicans retake the White House and Congress in January.
But even a fully unleashed U.S. energy sector would struggle to overcome output declines from maturing shale fields, he said.
Continental is active across the Lower 48 today, with holdings in the Permian, Bakken, Anadarko and Powder River basins.
“You look at the Bakken, it looks pretty flat,” Hamm said. “Maybe flat to down.”
“If you look at the Anadarko Basin, it’s not going tremendously,” he continued.
Wyoming’s Powder River Basin also isn’t seeing a tremendous amount of production growth, Hamm said.
Industry executives, Hamm included, see the Permian as the nation’s top driver of production growth going forward.
But the Permian might only have around 1.5 MMbbl/d to 2 MMbbl/d of growth capacity left to give.
The Permian Basin has been the major driver of U.S. oil production growth over the past decade. (Source: EIA Short-Term Energy Outlook November 2024)
“So, where’s it at? California?” he quipped. “Maybe you go find something else? This country’s been searched over pretty good.”
Producers have extracted more than 24 Bbbl of crude oil from the Lower 48 since 2019, according to U.S. Energy Information Administration (EIA) figures. “Eventually, you start using up a whole lot of resources,” Hamm said.
The U.S. is already producing more oil than any country in world history, driven by growth from tight shale basins. Total U.S. output averaged 13.4 MMbbl/d in August, per EIA data.
Many majors and large-cap U.S. E&Ps aren’t necessarily in a hurry to grow production even further.
Most producers are holding output relatively flat to churn out healthy levels of free cash flow, make distributions to shareholders and preserve the valuable shale inventory they have left.
Producers are also measuring growth and spending plans against a weakening global economic backdrop, falling crude prices and uncertainty over the direction of the OPEC+ cartel.
WTI oil prices averaged $71.99/bbl in October, down 16% year-over-year. Forward strip pricing shows WTI averaging around $66/bbl in 2025.
Weak prices, soft oil demand and rising global supply could force OPEC+ to delay a planned production increase in December by a month, according to media reports.
https://finance.yahoo.com/news/harold-hamm-drill-baby-drill-050000581.html
(Montel) Russian energy giant Gazprom is likely to keep supplying Austria with gas via an intermediary until year-end – provided the money keeps flowing, Walter Boltz, former head of Austrian regulator E-Control, told Montel on Monday.
“Gazprom wants to keep monetising its gas for as long as it can,” said Bolz, now a consultant for international law firm Baker McKenzie.
Austrian oil and gas company OMV warned last week its gas supply from Gazprom may terminate earlier than expected following an arbitration court ruling demanding Gazprom Export pay EUR 230m in damages to it. OMV intended to use the damages to offset payments for forthcoming gas supply.
Russian transit gas flows to Europe via Ukraine remained steady on Sunday, despite a Gazprom announcement late on Friday that it would cut supply to OMV to zero at the weekend.
Flows via Austria’s Baumgarten hub fell roughly 17% from Friday to Sunday from 295 GWh (26.6mcm) to 242 GWh. Some 238 GWh were nominated for Monday.
“According to our information, the deliveries to OMV have been suspended. But the same volume of gas is available on the market and is being purchased,” E-Control head Alfons Haber told Montel.
The timing of Gazprom’s decision was surprising, given a payment deadline of the 20th of the month was yet to materialise, Haber said. Austria remained well-supplied, he added.
Wait and see
Under Russian law, Gazprom was no longer entitled to sell gas to OMV, said Boltz. The company’s likely use of an intermediary would probably enable business to continue for a few weeks, he added, noting technical reasons alone made a sudden halt to flows difficult.
“If they earn enough money, then they may proceed this way until the end of the year and see what happens with transit,” Bolz said. “I don’t want to rule out that Gazprom doesn’t just decide to phase out deliveries if prices fall too low.”
Gazprom’s current five-year transit agreement with Ukraine for gas deliveries to Europe is scheduled to expire at the end of the year. Rumours of a potential Azeri replacement for the anticipated shortfall have prompted falls in European gas prices in recent months.
Russia still sent around 15bcm of gas via Ukraine to Europe last year, according to Entso-g data, equivalent to roughly half its remaining deliveries to Europe.
SINGAPORE (Reuters) – Oil prices edged up on Monday after fighting between Russia and Ukraine intensified over the weekend, although concerns about fuel demand in China, the world's second-largest consumer, and forecasts of a global oil surplus weighed on markets.
Brent crude futures gained 18 cents, or 0.3%, to $71.22 a barrel by 0713 GMT, while US West Texas Intermediate crude futures were at $67.08 a barrel, up 6 cents, or 0.1%.
Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, causing severe damage to the country's power system.
In a significant reversal of Washington's policy in the Ukraine-Russia conflict, President Joe Biden's administration has allowed Ukraine to use US-made weapons to strike deep into Russia, two US officials and a source familiar with the decision said on Sunday.
There was no immediate response from the Kremlin, which has warned that it would see a move to loosen the limits on Ukraine's use of US weapons as a major escalation.
"Biden allowing Ukraine to strike Russian forces around Kursk with long-range missiles might see a geopolitical bid come back into oil as it is an escalation of tensions there, in response to North Korean troops entering the fray," IG markets analyst Tony Sycamore said.
Saul Kavonic, an energy analyst at MST Marquee, said: "So far there has been little impact on Russian oil exports, but if Ukraine were to target more oil infrastructure that could see oil markets elevate further."
In Russia, at least three refineries have had to halt processing or cut runs due to heavy losses amid export curbs, rising crude prices and high borrowing costs, according to five industry sources.
Brent and WTI fell more than 3% last week on weak data from China and after the International Energy Agency forecasted that global oil supply will exceed demand by more than 1 million barrels per day in 2025 even if cuts remain in place from OPEC+.
China's refinery throughput fell 4.6% in October from last year and the country's factory output growth slowed last month, government data showed on Friday.
Investors also fretted over the pace and extent of interest rate cuts by the US Federal Reserve that have created uncertainty in global financial markets.
In the US, the number of operating oil rigs fell by one to 478 last week, the lowest since the week to July 19, Baker Hughes data showed.
https://dunyanews.tv/amp/english/851207.php
By Ron Bousso
LONDON (Reuters) - Almost five years ago, BP embarked on an ambitious attempt to transform itself from an oil company into a business focused on low-carbon power.
The British company is now trying to return to its roots as a big oil and gas player with a growth story to match rivals, revive its share price and allay investor concerns over future profits.
Rivals Shell and Norway's state-controlled Equinor are also scaling back energy transition plans set out earlier this decade.
Their change of direction reflects two major developments - the energy shock from Russia's invasion of Ukraine and a drop in profitability for many renewables projects, particularly offshore wind, due to spiralling costs, supply chain issues and technical problems.
BP CEO Murray Auchincloss plans to plough billions into new oil and gas developments, including in the U.S. Gulf Coast and the Middle East, as part of his drive to improve performance and boost returns.
BP has also slowed down low-carbon operations, halting 18 early-stage potential hydrogen projects and announcing plans to sell wind and solar operations. It has recently cut its hydrogen team in London by more than half to 40 staff, company sources told Reuters.
A BP spokesperson declined to comment on the layoffs.
Shell CEO Wael Sawan has vowed to take a ruthless approach to improve its performance and returns and close a yawning valuation gap with larger U.S. rivals Exxon Mobil and Chevron.
The company has scaled back low-carbon operations, including floating offshore wind and hydrogen projects, retreated from European and Chinese power markets, sold refineries and weakened a 2030 carbon reduction target.
Shell is seeking buyers for Select Carbon, an Australian company it acquired in 2020 which specialises in developing farming projects used to offset carbon emissions, sources close to the company told Reuters.
A Shell spokesperson declined to comment.
SKILL SHORTAGE?
Some BP employees wonder whether the company retains enough staff with the experience and skills necessary to reestablish itself as an oil and gas major.
Employees peppered CEO Auchincloss with questions at an online town hall meeting in early October as he detailed some of his plans for turning the ship around, according to four employees on the call.
He told them BP would and could develop new oil and gas production in a reversal of predecessor Bernard Looney’s strategy to build up renewable generation assets, reduce emissions and slowly cut oil and gas output targets.
In conversations with Reuters, some employees said they doubted BP has enough reservoir engineers to jump-start oil and gas output growth after it let go of hundreds of the upstream division’s employees since 2020.
https://finance.yahoo.com/news/european-oil-giants-step-back-060345078.html
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Posted 08:35 -- December corn is down 1/2 cent per bushel, January soybeans are down 6 1/2 cents per bushel. December KC wheat is up 7 1/2 cents per bushel, December Chicago wheat is up 6 3/4 cents per bushel and March Minneapolis wheat is up 5 1/2 cents. The Dow Jones Industrial Average is down 95.84 points at 43,349.15. The U.S. Dollar Index is down 0.110 at 106.58. December crude oil is up $1.10 per barrel at $68.12. The USDA announced three new export sales for 2024-25: 30,000 metric tons of soybean oil for delivery to India during the 2024/2025 marketing year, 261,264 metric tons (9.6 mb) of soybeans for delivery to Mexico during the 2024/2025 marketing year and 135,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2024/2025 marketing year. Corn, soybeans and bean oil start the new week lower, while wheat is higher on rising Black Sea tensions.
Posted 19:04 Sunday -- December corn is unchanged, and January soybeans are up 4 1/2 cents. December KC wheat is up 4 cents, and December Minneapolis wheat is up 4 cents. December crude oil is down $0.02, and Dow Jones futures are up 37 points. The U.S. Dollar Index is down 0.10, and December gold is up $8.50. Grain markets will attempt to follow through on Friday's reversal, which was the only up day for the week last week. World fundamentals for grains remain bearish, and the strong streak for export demand has hit a road bump in the recent week. Going into this week, South American weather will likely remain on the forefront of trader minds for any perceived issues that could possibly make a dent in stout production estimates from both the U.S. and Brazilian governments.
Livestock
OMAHA (DTN) -- December live cattle are up $0.75 at $183.7, January feeder cattle are up $1.35 at $248.575, December lean hogs are up $0.55 at $80.05, December corn is up 3 1/2 cents per bushel and December soybean meal is down $1.40. The Dow Jones Industrial Average is down 7.76 points. All three of the livestock markets are rallying into Monday's noon hour as traders are lending ample support to the contracts. With boxed beef prices and pork cutout values lower last week, traders will carefully watch consumer demand this week.
Posted 08:40 -- December live cattle are up $0.10 at $183.05, January feeder cattle are down $0.48 at $246.75, December lean hogs are up $0.35 at $79.85, December corn is down 1/2 cent per bushel and December soybean meal is down $1.00. The Dow Jones Industrial Average is down 91.13 points. Following last week's late technical surge in the cattle complex, both the live cattle and feeder cattle contracts could endure some pressure this week as traders try to find stability in the futures complex, all while knowing Friday's Cattle on Feed report will likely yield near-record-breaking on-feed totals. Monitoring consumer demand will also be important for both the cattle and hog markets.
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https://www.dtnpf.com/agriculture/web/ag/news/article/2024/11/18/periodic-updates-grains-livestock-2
La Niña threatens this year's soybean crop in Paraguay
18th Monday, November 2024 - 08:30 UTC
Some rain has fallen but still below average so the deficit remains
Paraguayan soybean producers warned this weekend that the La Niña weather phenomenon may affect this year's crop while the 2023/24 harvest is expected to reach a record in tons produced and exported, it was reported in Asunción.
The 2024/25 agricultural cycle could be affected by La Niña with rainfall deficits before the end of the year. According to the Paraguayan Chamber of Exporters and Marketers of Cereals and Oilseeds (Cámara Paraguaya de Exportadores y Comercializadores de Cereales y Oleaginosas - Capeco) 7.7 million tons of soybeans were exported until last month, an all-time high in terms of volumes shipped, with results even surpassing the previous record of 6.5 million tons during the 2019/20 campaign.
According to Capeco's Foreign Trade Advisor Sonia Tomassone current projections for the 2023/24 campaign exceed 10.7 million tons, although the exact figures are not to be announced until next month.
Tomassone pointed out that, despite a decrease in international prices of agricultural commodities, exports until October yielded revenues worth US$ 3.073 billion, or US$ 38.9 million than in the same period of 2023. Argentina continues to account for 83% of soybean shipments, followed by Brazil (10%) and Russia (4%). Other buyers were Peru, Spain, the United States, Uruguay, Japan, Chile, South Korea, Kuwait, Guatemala, and Indonesia.
"It should be noted that during October, for the first time, exports to Kuwait were recorded, which opens as a new market, so that to date there are 52 authorized markets for Paraguayan soybeans," said Tomassone.
Capeco insisted that given La Niña's threat, the 2024/25 agricultural campaign will require careful management and timely decisions in a challenging context due to moisture and rainfall deficits.
Forecasts from the Meteorology and Hydrology Directorate are not encouraging either: ”Although we are currently still going through the neutral phase, indicators point out that La Niña should set in now, before the end of the year and extend, at least, during the first five months of 2025,″ Director Eduardo Mingo explained. He also Mingo recalled that current rainfalls are still below average, so the deficit remains.
In late October, Meteorologist Max Pastén Castillo said that La Niña could cause the Paraguay River crisis to drag on into early 2025. This problem has caused a 30% increase in logistics as fewer barges sail through, each of them carrying cargoes below their full capacity, resulting in foreign trade losses of around US$ 300, according to the River and Maritime Shipowners Center (Centro de Armadores Fluviales y Marítimos - Cafym).
https://en.mercopress.com/2024/11/18/la-nina-threatens-this-year-s-soybean-crop-in-paraguay
US wheat markets fell significantly last week (Friday – Friday). Chicago wheat futures (Dec-24) ended down 6.3%. The cereals complex was pressured by a stronger US dollar, forecasts of favourable weather in key growing regions such as the US and western Europe, and the competitiveness of Black Sea exports.
US Dollar Index futures (Dec-24) closed higher each day last week, putting pressure on commodity markets, especially for wheat, with US export prices at the highest level in the market.
Favourable rains are forecast in the US, which could improve winter wheat crop conditions further. As a result, Chicago wheat futures prices are near four-year lows. Paris milling wheat futures were under pressure from US markets, as well as an accelerated winter planting campaign in France.
Improved weather is a key factor at the moment. Stratégie Grains estimate the wheat area in the EU to increase on the year, due to improved weather conditions, while barley and maize areas could decrease. Meanwhile, Australia is in the process of harvesting a larger-than-expected wheat crop.
Export sales of US maize were reported at 1.3 Mt for 2024/2025 by 7 November and down 53% from the previous week. Though weekly data (by 11 November) from the EIA showed ethanol production in the US is at an all-time record level.
FranceAgriMer reported that 71% of the French maize crop had been harvested by 11 November, up from 96% in 2023 and the five-year average of 93%. Speculators switched to a net long position in Chicago Board of Trade maize futures for the week ending 12 November.
Barley markets have been stable due to competitive prices compared to maize and feed wheat. However, barley prices have limited upside potential as demand from main importers China and Saudi Arabia is steady for now. FranceAgriMer reported that 89% of the French winter barley had been planted by 11 November, up from 83% last year, but behind the five-year average of 91%.
https://ahdb.org.uk/news/arable-market-report-18-november-2024
Australia’s Resolute Mining says it will $160 million to Mali’s ruling junta to resolve a tax dispute, more than a week after the company’s CEO and two other employees were detained in the West African country
Australian mine company to pay Mali junta $160 million after its CEO and 2 employees were detained
DAKAR, Senegal -- Australia’s Resolute Mining said Monday it would pay $160 million to Mali’s ruling junta to resolve a tax dispute, more than a week after the company’s CEO and two employees were detained in the West African country.
Earlier this month, the Australian gold mining company’s CEO Terence Holohan and the two others were detained in Mali's capital Bamako on Nov. 8 as they were visiting the country for talks over an unspecified dispute. The government did not say why they were detained.
Andrew Wray, the company’s non-executive chairman, said in a statement published on Resolute Mining’s website that all claims against the company made by Malian authorities, “including those related to tax, customs levies, maintenance and management of offshore accounts” are settled.
The company will pay Mali $80 million from “existing cash reserves," with an additional payment of $80 million in the “coming months," he added.
Resolute said the company's CEO and two employees were “safe and well,” and that it was working with Mali's authorities for their release.
The Australian company has been working for years at Mali’s Syama gold mine, a large-scale operation in the country’s southwest. It holds an 80% stake in mine, while the Malian government holds the remaining 20%.
The arrest is the latest controversy in Mali’s foreign-dominated and crucial mining sector, increasingly scrutinized by the military authorities. Four employees of Canadian company Barrick Gold also were detained for days in September.
Mali is one of Africa's leading gold producers, but has struggled for many years with jihadi violence and high levels of poverty and hunger. The military seized power in 2020 and since then the junta has placed foreign mining companies under growing pressure as it seeks to shore up the government's revenues.
SMM Rebar Daily: Weak Profitability Leads Steel Mills to Shift Production, Prices Fluctuate
[SMM Rebar Daily Review: Poor Profitability in Construction Materials, Steel Mills Gradually Shift to Other Products] Today, rebar futures fluctuated and closed at 3,279 points, up by 0.06%. During the session, futures turned positive, and transactions in various regions slightly improved. However, the futures market weakened in the afternoon, and spot cargo transactions declined accordingly, with overall transactions remaining weak. As winter approaches, downstream operating rates gradually decrease, and the profitability of construction materials is poor. Steel mills are gradually reducing rebar production, with some pig iron being converted to other product types, leading to a continuous decline in supply. On the demand side, temperatures have dropped sharply, with many areas in north China and north-west China experiencing sub-zero temperatures, causing a simultaneous decline in demand. Currently, construction materials are in a situation of weak supply and demand. Looking ahead, although steel mills have initiated three rounds of coke price reductions, the cost reduction is insufficient to offset the decline in product profitability. Steel mills prioritize the production of HRC and medium-thickness plates, leaving little room for an increase in construction materials. Even if demand further weakens, inventory may gradually accumulate, and there is insufficient upward momentum for steel prices. It is expected that steel prices may fluctuate in the short term.
Seaborne iron ore prices rebounded back above $100/t on Monday amid positive sentiment.
The Kallanish KORE 62% Fe index and KORE 65% Fe index rebounded by $1.65/tonne and $1.63/t, respectively, to $100.32/dry metric tonne cfr Qingdao and $115.74/dmt cfr. The KORE 58% Fe index, meanwhile, was $1.46/t higher at $87.5/dmt cfr.
On public platforms, 90,000t of Mac Fines were sold at $95.60/t with a laycan of 8-17 December. Meanwhile, 80,000t of JMBF Fines were booked at a floating price with the same laycan.
On the Dalian Commodity Exchange (DCE), the most-traded January 2025 iron ore contract rose by CNY 6/t ($0.82/t) to CNY 753/t on Monday.
On the Singapore Exchange, December 62% Fe futures and 65% Fe futures settled $2.65/t and $2.64/t higher, respectively, at $99.36/t and $113.87/t. The same contract for 58% Fe futures gained by $2.71/t to $86.36/t.
Meanwhile, 6mm+ heavy scrap delivered to mills in the Yangtze River Delta lost CNY 30/t to CNY 2,474/t. Tangshan billet reported a CNY 20/t increase on Monday to CNY 3,060/t.
Following China's recent introduction of a debt swap policy aimed at easing local government debt burdens, multiple provinces and cities in China have announced plans to issue special refinancing bonds to address implicit debts. As of mid-November, five regions have revealed bond issuances totalling approximately CNY 224 billion.
The Ministry of Finance allocated CNY 6 trillion in debt quotas to local governments earlier this month, signalling more announcements of special bonds were likely in late November and December. This policy aims to alleviate the strain of debt repayment while freeing up fiscal resources to support local economic development initiatives.
Speculation has also emerged about broader fiscal stimulus measures. Barclays Bank predicts that China could roll out a staged stimulus package worth CNY 500-1,000 billion to boost demand.
In a research report, the bank noted, "China's stimulus efforts have been significant but largely targeted at stabilizing the housing market and supporting local governments rather than driving consumption."
Despite these measures, Barclays forecasts China's economy to grow by just 4% next year, citing tariff impacts as a counterbalance to stimulus-driven gains.
Total imports of iron ore to the country for 9 months amounted to 8.14 million tons
In January-September of this year, steel enterprises of Turkey imported 1.01 million tons of iron ore from Ukraine compared to 499.17 thousand tons in 9 months of 2023 (+102.8% y/y). This is evidenced by preliminary data from the Turkish Statistical Institute (TUIK), SteelOrbis reports.
In particular, in September, Turkish consumers imported 82.5 thousand tons of iron ore of Ukrainian origin, which is 37.8% less than in the same month of 2023.
In general, over 9 months, Turkey increased imports of iron ore by 26.1% y/y – to 8.14 million tons, while spending on it increased by 26.7% y/y – to $1.02 billion. In September, the country imported 1.04 million tons of this raw material, up 145.7% compared to August and down 5.2% year-on-year. Import costs for the month amounted to $115.18 million, up 194.3% m/m and 9.6% y/y.
Brazil was the main supplier of raw materials in January-September, with 4.28 million tons (+5.2% y/y). Ukraine ranks second among the exporters of iron ore to Turkey, and South Africa is the third – 861.15 thousand tons (341.81 thousand tons in January-September 2023).
In January-September 2024, Turkish steel companies increased steel production by 13.8% compared to the same period in 2023, to 27.91 million tons. In September, the figure increased by 6.5% y/y and decreased by 1.7% m/m – to 3.09 million tons.
Recently, WorldSteel downgraded its short-term forecast for global steel demand in 2024 to -0.9% y/y (1.75 billion tons). In particular, in Turkey, the figure will decrease by 5.5% compared to 2023, to 36 million tons. In 2025, the trend will continue, but the rate of decline will slow to 1.7% y/y (35.5 million tons).