The scandal engulfing Volkswagen has spilled into the precious metals market, reflecting growing fears of a consumer shift away from the diesel engines that account for almost a half of the world's platinum demand.
Platinum prices dropped 3.6 percent on Tuesday, their biggest one-day fall in more than two years, "whacked" by concerns that the German carmaker's years-long effort to dupe U.S. regulators on diesel emissions will hurt sales of diesel engines, said Ed Meir, metals analyst at INTL FCStone.
The price of palladium, which is preferred for gasoline-powered engines but less so for diesel, barely dipped 0.6 percent.
The collapse highlights not only the enormity of the diesel industry's woes, but also the growing threat to platinum markets if, as some analysts now wonder, Volkswagen's scandals coupled with tougher regulations end a decades-long preference for diesel cars in Europe.
http://www.reuters.com/article/2015/09/23/usa-volkswagen-platinum-idUSL1N11S2WZ20150923
We expect this CDS blowout to continue.
Lukoil suggests little makes money below $50.
"Due to actual investments in production the volumes are still being added to the market, but the current cuts are starting to have an affect. In the next years the ongoing programs of investment shrinking - primarily from the transnational corporations - will certainly have their effect. As for now, the implementation of their long-term investment programs that started even before the current crisis has expressed in some production growth. But in 2014, the oil majors claimed to reduce the investment in production; in 2015, additional reductions by 10-20% and more were announced by such majors as BP, Shell, Chevron, Total. Overall cutback in global upstream investment was about $140 bln, and it is expected to reach $200-250 bln by 2016 year-end. Within 2-3 years, this will inevitably influence on the production and will have a long-term negative effect.
It should be noted that the average production costs in 2013 were 5 times higher than they had been 10 years before. As a result high revenues to shareholders were already in question before the recent drop in prices, therefore cutbacks in investments are being made quite actively. We should take into account that the status of the hydrocarbons resource base is permanently getting worse. The growth of world reserves of "conventional" oil and gas in 2014 was the lowest for the past 20 years; the negative trend remains for 4 years. Over 30% of new resources pertain to tight resources (deep water, heavy oil, super-tight reservoir, high content of acid gases).
A very limited set of countries have the ability to significantly build up oil and gas production now. While in the short to medium term they are mainly the Gulf countries, some African countries and possibly the United States, in the long term the main aspirations to meet the global demand for hydrocarbons are associated with Russia, Venezuela and Iran.
As a result, we can expect with a high probability that we are likely to witness the comeback of oil prices to a level that ensures a reasonable return on investment during the current investment cycle.
If compared to 1980s, the current share of the discovered conventional onshore fields reduced from 60% to less than 30% of all new discoveries. At the same time, the rate of more expensive deep-water and shallow-water fields, along with other sources of "high-tech" oil such as tight oil, has substantially grown. Such discoveries will prevail in the future. It is the deep-water oil that will define the full cycle costs and require higher prices for its efficient production.
Analysts got used to the fact that today Russia is not the absolute leader in the proven reserves of oil and gas being behind such countries as Venezuela, Saudi Arabia and Iran. However, according to a number of current estimates, the potential hydrocarbons resource base of the Russian Federation is the largest in the world.
Thus, the magnitude of potentially recoverable gas resources in Russia is estimated at 90 - 220 trillion cubic meters which is more than twice than the resource base of the United States (40-62 trillion cubic meters).
Though less recognized, the situation is similar with the oil resources. The potentially recoverable oil resources in Russia are estimated at 367-506 billion barrels which is significantly more than the capacity of not only the US but also Iraq, Iran and Saudi Arabia.
Take note that the major oil production projects in Russia are substantially below their main competitors on the cost curve, and are comparable with the projects the Gulf region. The oil production Opex per barrel in Russia in the recent years was 5-7 dollars, and in the current price environment, taking into account the weakening of the ruble, it went down to 2.8 dollars per barrel. This allows us to supply even at the lowest price scenarios, and the partners that have decided to join the Russian assets may count on a profitable return on investment."
~SechinOAO Rosneft, the world’s largest traded oil producer, increased drilling by 27 percent in the first seven months of the year, according to a statement. That helped the company stabilize output in the first half, Chief Executive Officer Igor Sechin said in Moscow on Friday.
The Kremlin-backed company is able to buck the international trend of cutbacks in oil projects because the plunge in the ruble and the quirks of
Russian tax law insulated producers from the crude price slump. The nation’s exports remain just as profitable as they were a year ago when the oil price was about $100, according to Citigroup.
“We don’t see a financial reason for Russian production to start falling,” Ronald Smith, an oil and gas analyst for Citigroup, said by phone. “If anyone was out there expecting Russia to balance the market, the signal is that’s not going to happen.”
Brent, the international oil benchmark, is trading at about $50 a barrel, less than half the level a year ago. While oil drilling in the U.S. fell by a record after the Organization of Petroleum Exporting Countries decided last year to defend market share rather than cut production, Russia’s industry has shrugged off the price slump. The nation’s oil production rose to a record in June.
Rosneft drilled more than 800 new wells through the first half of the year, according to the statement. Total depth drilled rose to 4.59 million meters (15 million feet) compared with 3.61 million meters in the first seven months of last year.
The company is buying Trican Well Service Ltd.’s Russian pressure pumping business for $140 million. Pressure pumping, also known as hydraulic fracturing, blasts water, sand and chemicals underground to release trapped hydrocarbons.
Rosneft “needs to drill actively in order to withstand falling production,” said Alexander Kornilov, an oil analyst at Alfa Bank. Results of increased drilling will probably be seen in 2016, he said.
At the company’s largest unit, RN-Yuganskneftegas, drilling increased by 40 percent including a larger number of wells using more advanced technology, the company said. Rosneft has changed its business plan toward increasing output at existing projects including Yuganskneftegas, Sechin told Prime Minister Dmitry Medvedev on Friday.
Foreign investors have turned especially bearish on the Australian economy, with one describing it as "toast", a National Australia Bank report says.
Chief economist Ivan Colhoun said a recent visit to clients in Britain, continental Europe and the Middle East revealed a "uniformly negative view on Australia's prospects".
"I have never experienced such overwhelming negativity on the outlook for the Australian economy and Australian dollar in all my years marketing the Australian economy offshore," he wrote on Monday.
"To be fair, one investor did say that they were not that negative on Australia.
Here is the most complete list of foreign Paolu 2015:
Earlier this year, Microsoft announced the closure of the factory is located in Nokia Beijing and Dongguan. Close Chinese factory, some of the equipment was transferred to the factory in Hanoi, Vietnam;
Japan Citizen watch company in liquidation before the Spring Festival this year announced the dissolution of the production base in Guangzhou;
Panasonic washing machine and microwave the vertical transfer of production from China to Shizuoka Prefecture and Kobe City plant;
Sharp plans to Tochigi yaita Yao City, Osaka plant and factories are producing more models of LCD TV and fridge, advancing to move back;
Daikin Industries company plans to launch the Japanese domestic market further home air conditioning production back from China factory located in Shiga Prefecture;
TDK famous brand electronics industry will also take part of the electronic components is expected to shift production from China to Akita Prefecture and other places of the plant;
Samsung built in China dedicated foundry declared bankruptcy Puguang Suzhou, Dongguan Puguang also dying;
Uniqlo parent Fast Retailing plans to begin low-cost clothing brand GU, Bangladesh, Indonesia plant increased OEM orders. Fast Retailing Group, about 85% of the product was originally manufactured in China, but with Chinese labor costs continue to rise, now decided outside of China by 20% to 30% of the production rate increased to 50%;
Muji program three years after the partner factories in China decreased from 229 to 86, from China's purchase rate lowered from 60% in half.
Moreover, since Recently, even Huawei, millet, Lenovo, TCL and other companies have begun withdrawing from the Chinese nation.
At its hub in Louisville, Ky., United Parcel Service Inc. recently rolled out 100 industrial-grade 3-D printers to make everything from iPhone gizmos to airplane parts.
UPS wants to find out if 3-D printing centers could shorten supply chains and cut into its $58 billion-a-year transportation business—or give it a leg up in a potentially emerging market for local production and delivery.
For Atlanta-based UPS, the difference could be existential. It doesn’t want 3-D printing to disrupt its business the way the Internet pulled the rug out from overnight document deliveries more than a decade ago.
“Should we be threatened by it or should we endorse it?” asked Dave Barnes, UPS’s chief information officer, during a recent presentation to employees and customers. “We saw the capability of a logistics company to be challenged on one side but on the other be an enabler.”
The troops and equipment are coming out of southern Russia, the U.S. officials said. The first passenger flight flew over Bulgaria and Greece, but after that route was shut down all subsequent flights have gone over the Caspian Sea and through Iran and Iraq.
A couple of Russian amphibious ships have also unloaded equipment at its naval base in Tartus, Syria, which is about 60 miles away from Latakia.
Moscow, which has backed Syrian President Bashar Assad throughout the nation's 4 1/2-year civil war, said its military experts are in Syria to train its military to use weapons supplied by Russia.
Russian Foreign Ministry spokeswoman Maria Zakharova accused the West of creating "strange hysteria" over Russian activities there, saying that Moscow has been openly supplying weapons and sending military specialists to Syria for a long time.
"Russia has never made a secret of its military-technical cooperation with Syria," she said, adding that she could "confirm and repeat once again that Russian military specialists are in Syria to help them master the weapons being supplied."
President Vladimir Putin and other Russian officials have sought to cast weapons supplies to Assad's regime as part of international efforts to combat the Islamic State of Iraq and Syria, or ISIS, and other militant organizations in Syria.
Federal Government's failure to meet its obligations on petrol subsidy claims, which has accumulated to over N500 billion is putting pressure on the marketers and the banks, THISDAY’s investigation has revealed.
THISDAY gathered that the current administration had not made any subsidy payments as against the sporadic payments of its predecessors. The last time marketers were paid was in March 2015 and that was for deliveries made in October 2014.
Investigations at Ministry of Finance revealed that the main reason for non-payment of subsidy claims was the massive reduction in government revenues as a result of the slump in oil prices and the belief by the Buhari government that there was still a large amount of waste in the administration of the subsidy payments.
A marketer who declined to be named declares: “This long period of non-payment is a real threat to the health of the financial system, the companies involved in petroleum products importation and to whom subsidy payments are owed and the sustenance of uninterrupted and stable supply of petroleum products to the country.”
The CEO of a major oil marketing company said: “The government is putting companies in a position where they will fail because it is not meeting its obligation. We are keeping a subsidy system that we obviously have difficulty maintaining and which we are maintaining at the expense of the operators. The issue is that these operators are now dying. This could lead to another round of defaults in the banking sector and a devastation of the downstream marketing sector."
Gold prices soared to a one-month high Thursday as fears of a global slowdown have investors seeking so-called safe haven assets like bonds and bullion. And according to Dennis Gartman, often referred to as the "commodities king," the rally in gold could just be starting.
"There's a real strength in the gold market when you look at it in non-U.S. dollar terms," the publisher of The Gartman Letter said Thursday in an interview with CNBC's "Futures Now." "The difference is enormous.
The report compares the current downturn to the previous bear market in mining which ran from 1997 to 2002 and argues that capex cutbacks are far from over.
Instead the industry should brace itself for at least another two years of shrinking budgets and outlays with the first signs of a "subdued" recovery only appearing early in 2018.
But even this prediction could be too bullish.
"Worryingly, metal prices have already fallen 12% further than they did during the bear market in the 1990s. In the last bear market, capex only recovered to its pre-crash (1997) level after seven years (2004)," according to Fellows.
The scene outside the main Beijing exchange yesterday am.Furious investors have kidnapped the head of a Chinese exchange for minor metal trading from his hotel and handed him to police, the Financial Times (FT) has reported.
The investors were angry that authorities had failed to find out why their funds had been frozen and believed by handing over Fanya Metals Exchange boss Shan Jiuliang to police they could spark an investigation.
The FT reported investors had been protesting for weeks about their funds being frozen at the exchange which is based in the southwestern city of Kunming and traded minor metals. It also offered high interest investment products from offices in Shanghai and Kunming.
Shan had been holding regular meetings with exchange backers and was on the way to Guangzhou for a business trip when he was captured. Photo: Weibo
The exchange, which had purchased minor metals for above market prices, has faltered as China's economy slowed.
TECO Energy Inc. has closed the sale of its coal mining subsidiary, TECO Coal LLC, to Cambrian Coal Corp. There were no up-front purchase payments for the sales agreement, however the agreement does include future contingent consideration of US$60 million if certain coal benchmark prices meet particular levels over the next five years.
