“You can see the future first in San Francisco.
Over the past year, the talk of the town has shifted from $10 billion compute clusters to $100 billion clusters to trillion-dollar clusters. Every six months, another zero is added to the boardroom plans. Behind the scenes, there’s a fierce scramble to secure every power contract still available for the rest of the decade, every voltage transformer that can possibly be procured. American big business is gearing up to pour trillions of dollars into a long-unseen mobilization of American industrial might. By the end of the decade, American electricity production will have grown tens of percent; from the shale fields of Pennsylvania to the solar farms of Nevada, hundreds of millions of GPUs will hum.
The AGI race has begun. We are building machines that can think and reason. By 2025/26, these machines will outpace college graduates. By the end of the decade, they will be smarter than you or I; we will have superintelligence, in the true sense of the word. Along the way, national security forces not seen in half a century will be unleashed, and before long, The Project will be on. If we’re lucky, we’ll be in an all-out race with the CCP; if we’re unlucky, an all-out war.
Everyone is now talking about AI, but few have the faintest glimmer of what is about to hit them. Nvidia analysts still think 2024 might be close to the peak. Mainstream pundits are stuck on the willful blindness of “it’s just predicting the next word”. They see only hype and business-as-usual; at most they entertain another internet-scale technological change.”
An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Thursday. (Yonhap)
Seoul shares closed lower for a second straight session on Wednesday as President Yoon Suk Yeol faces an impeachment vote this weekend following his botched declaration of martial law. The Korean won fell against the US dollar.
The benchmark Korea Composite Stock Price Index fell 22.15 points, or 0.90 percent, to close at 2,441.85.
Trade volume was moderate at 502.49 million shares worth 9.29 trillion won ($6.56 billion), with losers far outpacing winners 724 to 175.
Foreigners sold a net 319.19 billion won worth of stocks, offsetting institutions and individuals' stock purchases valued at 221.99 billion won.
Late Tuesday, Yoon declared martial law, accusing the main opposition Democratic Party of being "anti-state forces" paralyzing the operation of the nation with impeachment motions and a downsized budget bill.
But Yoon abandoned the martial law attempt, the country's first such motion in over four decades, early Wednesday after the National Assembly voted against the declaration.
Opposition parties submitted an impeachment motion against Yoon on Wednesday, with a parliamentary vote for the motion set on Saturday.
Large-cap stocks closed bearish, but chipmakers advanced.
Top carmaker Hyundai Motor fell 2.15 percent to 204,500 won, leading battery maker LG Energy Solution declined 1.8 percent to 382,000 won, and national flag carrier Korean Air shed 0.81 percent to 24,550 won.
Leading refiner SK Innovation dropped 1.59 percent to 111,300 won, steelmaker POSCO Holdings declined 2.38 percent to 266,500 won, and leading beverage firm HiteJinro was down 2.15 percent to 20,450 won.
But market behemoth Samsung Electronics rose 1.13 percent to 53,700 won, and No. 2 chipmaker SK hynix jumped 2.98 percent to 173,000 won.
Among other gainers, Korea Zinc, the world's largest refined zinc smelter, jumped 19.69 percent to 2,000,000 won, and No. 1 shipping firm HMM gained 2.19 percent to 18,210 won.
The local currency was trading at 1,415.10 won against the greenback at 3:30 p.m., down 5 won from the previous session.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 2.3 basis points to 2.603 percent, and the return on the benchmark five-year government bonds shed 2 basis points to 2.620 percent. (Yonhap)
Rebound from natural disasters and strikes likely to impact data
The upcoming United States (US) employment non-farm payrolls report is expected to show 218,000 new jobs in November, a significant increase from October's 12,000 figure. The October US employment report faced disruptions from Hurricanes Helene and Milton, along with widespread industrial action.
The Bureau of Labour Statistics estimates that around 40,000 striking workers returned to their jobs in November. Several bank economists project this number to be higher, with between 50,000 - 60,000 jobs gained in storm-affected areas, contributing to their total forecast of between 200,000 - 250,000 new positions.
The combination of strike resolutions and storm recovery could create significant volatility in foreign exchange (forex) markets and other assets sensitive to employment data, such as the US stock market and the gold price.
Sector-specific expectations
- Non-cyclical sectors: including government, education, and health services are expected to drive hiring
- Manufacturing sector: employment should show improvement as strike impacts fade
- Transportation and warehousing sector: could surprise to the upside due to strong storage demand
- Retail sector: may see slower hiring due to the later timing of Thanksgiving and Black Friday
Labour market conditions are an important factor for policymakers as they gauge the health of the economy and are directly related to inflation.
Federal Reserve implications
The Federal Reserve (Fed) faces its final meeting of 2024 with markets pricing a 74% probability of 25 basis point (bp) interest rate cut. The current Fed Funds rate target range stands at 4.50% - 4.75%.
November's consumer price index (CPI) data could influence the Fed's decision, as stronger-than-expected wage growth might cause the Fed to hold rates steady.
The unemployment rate is forecast to remain steady from October at 4.1% while hourly earnings are predicted to rise 0.3% on a month-on-month (MoM), up from 0.4% in October.
US dollar index technical analysis
The US dollar index remains in a clearly defined uptrend, and only a fall through its late November low at 105.595 could lead to a consolidation phase.
In such a scenario, the 105 region may be revisited. While the 200-day simple moving average (SMA) at 103.90 supports, the long-term uptrend remains intact.
A rise above the 108.07 November peak could lead to the 110.00 region being hit. Further up, the 114.745 September 2022 peak represents another possible upside target.
Photo: Yaorusheng via Getty Images
Critical Questions by Gracelin Baskaran and Meredith Schwartz
Published December 4, 2024
On Tuesday, December 3, China announced stringent export restrictions on “dual-use” technologies for both civilian and military use, specifically targeted at the United States. These restrictions double down on previously announced controls on these metals, going so far as to ban shipments of antimony, gallium, and germanium to the United States. The new restrictions marked several firsts in the trade war—the first time Chinese critical minerals export restrictions were targeted at the United States rather than all countries and the first time restrictions on critical minerals were a direct response to restrictions on advanced technologies. Critical mineral security is now intrinsically linked to the escalating tech trade war.
China’s announcement comes on the heels of the Biden administration’s crackdown this week on the Chinese semiconductor industry, the latest retaliatory action in a tit-for-tat technology trade war that has permeated throughout the Biden administration. Therefore, this week’s announcement from the Chinese Ministry of Commerce should not be viewed as a stand-alone development, but rather the latest move in a series of punitive export controls, justified by both nations as national security imperatives.
Q1: What actions did the Biden administration take this week to curb China’s access to advanced semiconductors?
A1: This week, the United States issued its most stringent crackdown on China’s semiconductor industry, limiting its ability to develop artificial intelligence (AI) for modern military applications and adopting regulatory reforms to strengthen the enforcement of previous controls.
The new restrictions prohibit the export to China of 24 types of semiconductor manufacturing equipment and three related software tools. They also prohibit the export of advanced memory chips, chipmaking machinery, and other semiconductor technologies to 140 Chinese chipmaking companies including major Chinese chip manufacturers and toolmakers. These companies were also added to the U.S. Department of Commerce’s Entity List—a blacklist that mandates U.S. firms to apply for export licenses that will be near impossible to secure. To make the blacklist more difficult to bypass, the United States will apply the foreign direct product rule, which will impact non-U.S. companies that utilize U.S. chips in their tools and make it difficult for U.S. firms to produce these tools in third countries and export to China. The rule is designed to tighten the chokehold on China’s semiconductor industry, preventing Chinese firms from circumventing the U.S. export bans by importing chips and machinery with U.S.-designed components. However, some allied countries may receive exemptions, affecting the efficacy of the rule.
Q2: How has China retaliated against the United States for this week’s restrictions, and which minerals are impacted?
A2: China’s Ministry of Commerce immediately responded by imposing export bans on several minerals used in semiconductor and defense technology manufacturing to the United States—a rapid retaliation by Beijing. China banned shipments of gallium, germanium, antimony, and so-called superhard materials to the United States due to their “dual military and civilian uses.” The export of graphite will now also be subject to greater scrutiny.
These restrictions come on the heels of the release of an updated Dual-Use Export Control List by China’s Ministry of Commerce. The list expands and consolidates a list of items deemed to have dual civilian and military uses. This updated framework introduces a unified system and facilitates stricter oversight to tighten China’s export controls. This list not only streamlined the implementation of this week’s export controls but leaves the door open for China to implement new export bans on other strategic minerals on the list such as tungsten.
Q3: What impact will these restrictions have on U.S. national security interests?
A3: Gallium, germanium, and antimony are vital inputs for defense technologies. China is making significant investments in munitions and acquiring high-end weapons systems and equipment at a rate that is five to six times faster than that of the United States. In terms of strengthening military preparedness, China is operating in a wartime posture while the United States is operating in a peacetime posture. Even prior to the new restrictions, the U.S. defense industrial base lacked the capacity and surge capabilities to meet defense technology production needs. Bans on vital mineral inputs will only further allow China to outpace the United States in building these capabilities.
One example of how restrictions undermine U.S. national security is antimony trade. Antimony has a number of defense technology-use cases. China is the world’s leading producer of antimony, accounting for 48 percent of global production and 63 percent of U.S. antimony imports. The United States has no domestic antimony production and severely limited stockpiles. Since antimony export restrictions were imposed in September 2024, antimony shipments from China dropped 97 percent while prices rose 200 percent. Elevating export controls from restrictions to a ban may not make a material difference in the antimony market considering U.S. firms have already had to adapt to the reality of an antimony supply gap over the last three months. By banning antimony exports and specifically targeting the U.S. market, Beijing sends a strong message to Washington that it is not afraid to further escalate the trade war by cutting off the United States from critical minerals needed for strategic industries.
Q4: What are the economic security implications of the new restrictions?
A4: Gallium and germanium are the two most vital minerals to develop the next generation of advanced chips. Gallium and germanium are increasingly being chosen over traditional silicon for high-performance chips used in defense applications due to their properties that boost device performance, speed, and energy efficiency. The future of semiconductors for defense applications depends on reliable supplies of high-purity gallium and germanium. A U.S. Geological Survey report last month estimated that a total export ban on gallium and germanium could result in a $3.4 billion loss in GDP for the U.S. economy.
Graphite exports are not banned entirely, but Beijing is further tightening the restrictions it first imposed in 2023. This poses a significant challenge to the United States. China accounts for 77 percent of natural graphite production, over 95 percent of synthetic graphite production, and nearly 100 percent of graphite refining. The United States, meanwhile, contains less than 1 percent of the world’s graphite reserves and is 100 percent import reliant. Synthetic graphite manufacturing projects are in the pipeline, but capacity remains limited.
Graphite is an important input for the electric vehicle (EV) industry. Gasoline and diesel vehicles do not require any graphite—but EVs require an average of 136 pounds of graphite. The EV industry is important for the U.S. economy. In June 2024, domestic automotive manufacturing jobs reached a 34-year high. The Inflation Reduction Act helped mobilize $114 billion in private sector investments in the EV ecosystem, which is expected to generate 99,600 jobs. Without graphite, there will be no EV industry.
Q5: How has the United States used targeted export controls against China over the last five years, and how have they impacted critical mineral supply chains?
A5: The United States and China began a trade war related to critical minerals and strategic technologies in 2019 when the Trump administration targeted Chinese communications giant Huawei with a series of export restrictions. The U.S. Department of Commerce added Huawei to the Entity List, curbing the company’s access to U.S. chips and barring it from the U.S. market. Huawei was able to circumvent some of the restrictions by importing chips from other foreign manufacturers. To close this loophole, the Trump administration followed with tighter restrictions blocking Huawei’s access to chips sold by third parties made with tools acquired from the United States. The Trump administration did not stop at Huawei, restricting dozens of other Chinese tech companies deemed national security threats, such as Semiconductor Manufacturing International Corporation, via the Entity List.
Over the last four years, the Biden administration has accelerated the trade war, rolling out tit-for-tat export restrictions on crucial products to the cutting-edge semiconductor industry. In October 2022, the Biden administration first issued semiconductor export controls designed to address the national security risks associated with China accessing advanced U.S. AI chips. The Department of Commerce’s Bureau of Industry and Security listed the types of chips that it intended to be subject to the rule, including graphics processing units, tensor processing units, application-specific integrated circuits, and others. In July of 2023, Beijing retaliated by announcing export restrictions on gallium and germanium, two semiconductor minerals that the United States does not domestically produce. Under these restrictions, U.S. firms were still able to import some Chinese materials with the correct licensing, although imports have fallen drastically.
In October 2023, the Biden administration expanded the 2022 controls with further restrictions on the export of AI chips and manufacturing equipment to China. China responded with restrictions on high-purity and high-quality graphite, citing national security concerns. This action concerned not only the U.S. chipmaking industry but also the EV industry still reliant on Chinese graphite as there was no U.S. graphite mine or synthetic graphite facility in operation at the time.
Over the last five years, the United States has focused on denying China cutting-edge AI chips and manufacturing equipment to prevent Beijing from producing advanced weaponry and AI systems. China has retaliated by targeting vulnerable U.S. critical minerals supply chains, restricting the export of vital semiconductor minerals like gallium, germanium, and graphite, and antimony for defense needs
With each iteration of export controls, the number of products has expanded, the controls have tightened, and the U.S. Entity List of essentially blacklisted Chinese companies has grown. This week, the trade war escalated with some of the most direct and drastic export controls for minerals needed for dual-use technologies—particularly semiconductors and military applications—specifically targeted at the United States for the first time rather than all jurisdictions.
Q6: How can the incoming administration ensure that U.S. firms have access to these critical minerals without imports from China?
A6: There is ample evidence that the trade war will escalate given the new administration is even more hawkish toward China and intends to impose higher tariffs. China’s Ministry of Commerce noted that Washington is “weaponizing trade and technology” under the guise of national security.
The United States will need to deploy incentives and financing instruments to encourage investments with “existing friends” and “new friends” to secure a supply of vital resources. For example, amidst the new graphite restrictions, investments in three African countries, Madagascar, Mozambique, and Tanzania—which cumulatively have 21 percent of the world’s graphite resources, compared to China’s 15.8 percent—will be important. The U.S. International Development Finance Corporation issued a $150 million loan to a graphite mining project in Mozambique in 2024.
For tungsten, which is facing potential restrictions and is vital for defense technologies, South Korea will be an important ally. The United States currently does not produce any tungsten. But Canadian firm Almonty Industries, which will reopen its Sandong mine and processing plant in South Korea in 2025, has committed 45 percent of its output to the United States through a long-term supply contract.
At present, the restrictions will have a limited impact given the affected commodities have already been hit by export restrictions. Following Chinese antimony restrictions in August of 2024, China’s shipments of antimony products plunged 97 percent. No shipments of Chinese wrought or unwrought germanium or gallium have been sent to the United States from China in the past year, despite the United States being a large market for the materials. Therefore, China’s announcement this week seems to be largely symbolic rather than practical.
However, China has dominance in a much larger number of commodities than these four minerals. Additional export controls—including bans—are likely as a new administration takes office with ambitious tariff policies and a history of trade wars.
Gracelin Baskaran is the director of the Critical Minerals Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Meredith Schwartz is a research associate for the Critical Minerals Security Program at CSIS.
Dozens of small trading players and middlemen have recently dropped out of trading Russian crude oil to India, as Russia’s interest rates and costs to fund trades have soared, Reuters reported exclusively on Thursday, quoting trade sources and customs and shipping data.
India, one of Russia’s top two markets to sell its oil banned in the West, now relies on Russian crude for a large part of its consumption. Since 2022, after the Russian invasion of Ukraine and the Western sanctions on Moscow, Russia has become India’s single biggest supplier of crude.
Back in 2022 and in 2023, many traders raced to deliver Russian crude to India, lured by the lucrative profits of the trades as risks were higher.
Little-known and newly-incorporated trading companies have handled large volumes of Russian crude oil and products since the Russian invasion of Ukraine and the withdrawal of Western firms from trades with Russia’s oil.
These new oil trading companies that have mushroomed are incorporated in jurisdictions outside of Europe and are often notoriously opaque in their management and dealings.
However, Russia has recently raised its benchmark interest rate to 21%. That’s the highest in two decades and is, of course, affecting funding costs for traders who depend on Russian banks to finance trades with Russian oil, as Western banks are not funding any.
Since the funding costs spiked earlier this year, many middlemen have dropped out of the trades with India, leaving the business to several trading houses.
Currently, the majority of Russian crude volumes are being handled by Litasco Middle East, the Dubai-based trading arm of Russia’s Lukoil, as well as Dubai-based firms Hinera Trading and Black Pearl Energy Trading, per customs and shipping data that Reuters has seen.
India’s demand for Russian crude, which is cheaper than alternatives due to the sanctions, has been so high recently that the discounts at which Russia’s oil is selling to India have narrowed. As a result, private Indian refiners, including Reliance Industries and Rosneft-controlled Nayara Energy, cut their imports of Russian crude by 18% in November compared to October, the New Indian Express reported this week, citing data from energy commodity tracking firm Vortexa.
By Tsvetana Paraskova for Oilprice.com
OPEC+ delayed the revival of its oil production by three months, a delegate said, the third time it has deferred the move while crude prices struggle amid a looming surplus.
The group led by Saudi Arabia and Russia pushed back the series of supply increases, which had been due to begin with a hike of 180,000 barrels a day in January. It will instead start in April and unwind the cuts at a slower place than previously planned, finishing the process in September 2026, according to the delegate who asked not to be named because the information is not public.
The Organization of Petroleum Exporting Countries and its partners had first announced in June that they would restore output halted since 2022, reviving 2.2 million barrels per day in monthly tranches. But its plans have been thwarted as oil demand falters in top consumer China, while supplies boom from the US, Brazil and Canada. Global markets face a surplus in 2025 even if Opec+ does not add a single barrel, according to the International Energy Agency.
Oil prices have declined about 18 per cent since early July as traders shrugged off turmoil in Middle East and focus instead the slowdown in China, which has grappled with a range of economic challenges. Citigroup and JPMorgan Chase have predicted that crude will keep sliding into the US$60s next year, even if Opec+ continues to restrain production.
That poses a financial threat for many members including the Saudis, who have already been forced to cut spending on lavish economic transformation plans. Their oil-market ally, Russian President Vladimir Putin, seeks revenue to continue waging war on Ukraine.
Pausing the supply restart also gives Opec+ some time to assess the impact of president-elect Donald Trump’s return to the White House. He has signalled he could renew the campaign of “maximum pressure” on crude exports from Iran, deployed during his first term to curtail Teheran’s nuclear programme. Squeezing the Islamic Republic’s oil sales could leave a gap for its Middle East adversaries to fill.
On the other hand, Trump has also warned of punitive trade tariffs on several countries including China, which could deliver a fresh blow to Beijing’s economic activity and fuel consumption. BLOOMBERG
BP (BP) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this oil and gas company have returned -3.4%, compared to the Zacks S&P 500 composite's +6.7% change. During this period, the Zacks Oil and Gas - Integrated - International industry, which BP falls in, has lost 2%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
BP is expected to post earnings of $0.70 per share for the current quarter, representing a year-over-year change of -34.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -10.3%.
For the current fiscal year, the consensus earnings estimate of $3.57 points to a change of -25.3% from the prior year. Over the last 30 days, this estimate has changed -3.1%.
For the next fiscal year, the consensus earnings estimate of $3.89 indicates a change of +9.2% from what BP is expected to report a year ago. Over the past month, the estimate has changed -5.6%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, BP is rated Zacks Rank #3 (Hold).
12.05.2024 By Tank Terminals
December 05, 2024 [Reuters]- Rising costs of building and equipping new U.S. liquefied natural gas plants will reduce the competitiveness of U.S. gas exports, LNG analysts at Poten & Partners predicted on Tuesday.
U.S projects have faced rising construction costs, with Venture Global’s Plaquemines export plant under construction in Louisiana over budget by $2.3 billion, and Golden Pass LNG, a joint venture between Exxon Mobil and QatarEnergy (QATPE.UL), more than $2 billion over its original budget.
Natural gas prices could also go to as high as $6 a million standard cubic feet because of increased demand from LNG export plants, a possible 20% growth in electricity usage and the need for significant investment in infrastructure, said Jason Feer, Poten and Partners’ business intelligence chief.
“We’ve got a lot of gas in the U.S., but we don’t really have vast amounts of really cheap gas,” Feer said.
The Biden administration’s export permitting pause likely will keep global LNG prices higher for longer and benefit existing exporters, Feer said at Poten’s Global LNG Outlook conference.
Feer added that for the firms proposing new export plants along the U.S. Gulf Coast, landing new customers will present a greater risk than regulation, and that even if the incoming Trump administration removed all the regulations, finding customers will still be a challenge.
Among other risks facing LNG exporters is political pressure in China limiting its switch away from coal, potentially lifting its LNG demand by 5% over the next decade. Europe is highly likely to resume buying Russian gas if there is peace in Ukraine, Feer said.
“There is this idea that China will switch from coal to gas. We think that is very unlikely… that will make China dependent on the U.S. or Qatar, that’s expensive and a potential risk to their national security, so I don’t see that happening,” Feer said.
In the near term, Brent oil-linked LNG prices are trending lower and could decline further. Feer said $12 per million British thermal units is the new average global price for LNG and that should continue for the next decade.
13,300 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data
The new rule change will allow importers to use other banks or pay "in another way agreed upon by the Russian supplier with the foreign buyer."
While the Kremlin cut off the supply of pipeline gas to countries like Germany, the Czech Republic and Poland in a bid to weaponize energy flows in the wake of the invasion, Hungary and Slovakia have continued to receive deliveries as part of a long-term contract with state energy firm Gazprom.
On Wednesday, Budapest — which still relies on Russia for around two-thirds of its natural gas supplies — announced it had asked the U.S. for an exemption to the sanctions to allow it to continue to do business through Gazprombank.
"Gazprombank was the key financial channel for oil and gas payments with Europe," said Maria Shagina, a sanctions expert at the International Institute for Strategic Studies. "Blacklisting the bank has already caused the Russian ruble to tumble and it will affect gas payments with Hungary and Slovakia."
Moscow's central bank suspended currency trading last week after a dramatic decline in the value of the ruble following the announcement of the latest sanctions.
However, Shagina added that while finding alternative banks to handle payment might offer a "workaround," other institutions could also face sanctions as part of efforts to cut off the flow of cash fueling the war.
The oilfield service sector is poised for more consolidation in 2025, according to Deloitte 's 2025 Oil and Gas Industry Outlook, with President-elect Donald Trump expected loosen regulations on the U.S. oil and gas industry.
The uptick in deals in the services sector would follow a wave of mega-mergers among oil producers, including Exxon Mobil and Pioneer Natural Resources and ConocoPhillips and Marathon Oil.
Small-sized oilfield companies could seek favorable buyouts as their customer base consolidates and shrinks, according to Deloitte, the world's largest consulting firm, following rampant M&A activity across upstream customers.
WHY IT MATTERS
Deals across the U.S. shale patch have shrunk oilfield firms' customer bases, notably in the prolific Permian basin straddling Texas and New Mexico. That field is set to produce 6.51 million bpd of crude in 2025, according to the EIA, up from 6.29 in 2024. It accounts for just under half of total U.S. output.
BY THE NUMBERS
Deals in the oilfield services sector in the first nine months of 2024 reached $19.7 billion, the highest since 2018, according to Deloitte.
Buyer interest for drilling rigs increased in 2024 with deal value reaching $3.8 billion, its second-highest level since 2018.
KEY QUOTES
"We think the new administration could be positive for M&A, and that we will see a little more loosening around that because it was getting more difficult to get M&A done the last few years," Deloitte's global sector leader for oil, gas and chemicals practice John England said in an interview.
U.S. lawmakers have sought increased scrutiny by the Federal Trade Commission (FTC) over multi-billion dollar deals.
Gas producers Chesapeake Energy and Southwestern Energy delayed their $7.4 billion merger after the FTC requested further information in April. The companies closed the deal in October. Exxon Mobil and Pioneer Natural Resources received similar requests from the FTC related to their $60 billion merger, which closed in May.
"A fairly fragmented (oilfield service) market and some loosening from the administration sets a nice stage for potential consolidation," England said.
Russian oil flows to the Czech Republic via the Druzhba pipeline were seen resuming on Friday after payment issues linked to the transit via Ukraine, which caused a halt, have been sorted, two sources familiar with the matter told Reuters on Thursday.
The stoppage, first confirmed on Tuesday, was reported on Wednesday by Unipetrol, a subsidiary of Poland's Orlen PKN.
Unipetrol said that refining at the Litvinov refinery, which uses Russian crude, was running using the company's reserves which could last a week before it taps state reserves. As a contingency measure the Czech government approved lending Unipetrol 330,000 metric tons of oil from state reserves.
Czech pipeline operator MERO and Unipetrol both said they could not confirm the information about the expected resumption of supply.
Rosneft, which supplies Unipetrol had no immediate comment, while Russia's pipeline operator Transneft did not immediately replied to Reuters questions. Ukrainian pipeline operator Uktransnafta had no immediate comment.
By Irina Slav - Dec 05, 2024, 7:00 PM CST
Dropping temperatures in the United States and Europe have prompted a rally in U.S. natural gas prices. Although somewhat hesitant, this rally could help avoid a shortage in the not-too-distant future.
Winter is peak demand season for natural gas as demand for readily available, baseload electricity shoots up. This year has been no exception. In Europe, Germany's gas consumption surged by 79% in November from October-the biggest monthly increase in consumption ever recorded, Reuters' Gavin Maguire reported.
Germany, as the rest of Europe, gets a lot of gas in liquefied form from the United States, driving demand there higher, too. This is already being registered. At the end of November, demand for natural gas from liquefaction plants on the Gulf Coast surged close to all-time highs, hitting 14.6 billion cu m on a single day. This was the highest daily demand rate since the start of the year, just a bit lower than the record of 14.7 billion cu m booked in December last year. There is still time to break that record, however, thanks to the low wind speeds in Europe.
These low wind speeds are what media report prompted the surge in German natural gas generation-and coal generation, too. But wind speeds are not something any country can organize its generation around, especially in winter. This means gas demand is going to grow further-and so will U.S. prices despite their continued vulnerability to any bearish news.
This vulnerability was demonstrated earlier this week when forecasts for warmer-than-expected weather in much of the United States prompted traders to sell, leading to a dip in prices to a two-week low. However, at the same time, speculators have been busy covering their short bets on natural gas in anticipation of higher demand. Their net position is now net long, energy market analyst John Kemp reported this week, at a sizable 664 billion cu ft, from a net short of 23 billion cu ft a week earlier.
This is significant in the context of record-high gas in storage, which the Energy Information Administration reported earlier this week. The working gas storage in the Lower 48 ended injection season at a level of 3.992 trillion cu ft, the EIA said on Monday, which was the highest level for the start of heating season since 2016. Meanwhile, output is trending lower in response to the prolonged depression in prices. With demand rising while output shrinks, the high level of gas inventories is not going to last for long-despite the mild weather forecasts.
The sooner this imbalance pushes prices consistently higher, the better for future supply security. It normally takes a few months before production in the shale patch catches up with demand on the upward curve of the oil and gas cycle after prices rise, motivating this increase in production. The longer it takes for that response, the greater the danger of a tight supply situation-because seasonal demand is not the only factor driving overall demand higher.
Natural gas producers are already in talks with Big Tech data center owners to supply reliable electricity for their artificial intelligence operations. They are committing future production, in other words, to the tune of between 3 and 6 billion cu ft daily, according to estimates from S&P Global Ratings. These estimates show data center electricity demand rising by an annual 12% between now and 2030. U.S. natgas prices are not going to stay low for long if those estimates turn out to be true. It then might be a while before they get depressed again by abundant supply.
https://oilprice.com/Energy/Natural-Gas/US-Gas-Prices-Climb-as-Europe-Scrambles-for-Supply.amp.html
MORNING AG OUTLOOK
Grains are mixed. US stocks are lower. US Dollar is lower. Gold is lower. Crude is higher. US Fed Chairman suggest caution in futures rate cuts. Bitcoin is over $100,000.
SOYBEANS
SH is near 9.94. Dalian soybean, soymeal palmoil and soyoil were lower. Rains are in C and S Brazil. N Brazil and Argentina are dry. Weekly US soybean export sales are est at 1,100-2,500 mt vs 2,490 last week. Soymeal sales are est at 150-550 mt vs 487 last week. Soyoil sales are est at 10-060 mt vs 124 last week. USDA announced 30 mt US soyoil to S Korea. Trade est US soybean carryout at 469 mil bu vs USDA Nov est of 470. Trade also est Brazil soybean crop at 169.3 mmt vs USDA Nov est of 169.0 and Argentina at 51.3 mmt vs 51.0. Trade est World soybean end stocks near 132.4 mmt vs USDA Nov 131.7.
CORN
CH is near 4.29. CH could be in a 4.10-4.40 range. Dalian corn futures were lower and made new contract lows. Weekly US corn export sales are est at 750-1,500 mt vs 1,062 last week. Trade est US corn carryout at 1,906 mil bu vs USDA Nov est of 1,938. Trade also est Brazil corn crop at 127.1 mmt vs USDA Nov est of 127.0 and Argentina at 50.8 mmt vs 51.0. Weekly US ethanol production was down 4 pct vs last week. Stocks were up 7 pct vs last year. Margins remain in the red. Trade est World corn end stocks near 303.5 mmt vs USDA Nov 304.1.
WHEAT
WH is near 5.51. KWH is near 5.46. MWH is near 5.96. MWH-MWK spread at -8 carry. Black Sea wheat prices are dropping looking for demand. India forecaster suggest Dec-Feb temps above normal which could stress their wheat crop. Most global weather remain mostly favorable for 2025 crops. Trade est US wheat carryout at 814 mil bu vs USDA Nov est of 815. Weekly US wheat export sales are est at 250-550 mt vs 366 last week. US HRW export prices are now near Germany. Trade est World wheat end stocks near 257.7 mmt vs USDA Nov 257.5. Trade est Canada wheat crop a5 35.0 mmt vs 32.9 ly and USDA 35.0.
In late November, Copper Plate prices in Asia fell due to continued weak demand from downstream industries. The strength of the US dollar significantly impacted Japan's Copper Plate market, while China grappled with the effects of lackluster economic stimulus measures. Despite global copper mining indicating surplus production, demand has remained steady. Meanwhile, Ivanhoe Mines reported a record output at their Kamoa-Kakula Copper Complex in the DRC, with the combined efforts of Phase 1, 2, and 3 processing units yielding 45,019 tonnes of copper concentrate in November.
In Japan, the Copper Plate market has experienced a slight decrease in prices, with a 0.5% reduction noted. Factors influencing this downturn include the fortifying U.S. dollar and the possibility of new U.S. tariffs. These elements have posed difficulties for the market's stability. The strong U.S. dollar holds significant domination over the international metals market, which could result in a diminished interest from global purchasers. Additionally, the impending import tariffs suggested by President-elect Donald Trump are stirring unease among those involved in the market. There is a concern that these tariffs may hinder worldwide economic progress and disrupt the equilibrium of demand and supply for Copper Plates, leading to potential fluctuations in pricing.
In the final week of November, Copper Plate prices in China saw a marginal drop of 0.3%. Concerns over global growth and doubts about China's economic recovery adversely affected Copper Plate markets. The data indicated that production surpassed the level of consumption. A leading importer in China suggested that more economic incentives are needed to maintain strong demand. Copper Plate prices struggled under the Trump administration's economic policies and the financial uncertainties in China, which dampened investor confidence. Although there was a slight uptick in home sales, it did little to mitigate the wider downturn in construction activities observed in November.
Heading into the final months of 2024 and the beginning of 2025, the East Asian market is poised for an increase in Copper Plate prices. China's electronics and computer manufacturing sector is expected to experience a significant boost, with projections indicating a robust growth exceeding 11% in 2024, and continuing with an additional rise of approximately 5% in the subsequent year. This industrial growth is driven by the escalating global demand for computing devices, office necessities, and cutting-edge telecommunication apparatus. Such a surge is anticipated to cast a favorable influence on the Copper Plate industry. ChemAnalyst forecasts a rise in the Copper Plate prices, driven by anticipated demand surges in various industries.
Antofagasta declined to comment. Jiangxi Copper was not immediately available for comment.
The fees, known as treatment and refining charges (TC/RCs), a key source of revenue for smelters, paid by miners when they sell concentrate, or semi-processed ore, to be refined into metal.
The charges tend to fall when ore supply declines and rise when more concentrate is available.
The fees agreed are lower than estimates in a Reuters poll of industry participants last month, where charges were seen at a 15-year-low – between the high-$20s and mid-$30s a ton.
The first agreement between global copper miners and smelters in China, the world’s dominant processor, has often set a benchmark for fees of other industry players in recent years.
However, this year, according to one of the sources, other Chinese smelters are willing to negotiate their own fees with slight changes to that reached between Antofagasta and Jiangxi.
In the spot market, copper concentrate supply has tightened this year due to unexpected mine operations disruptions and rising smelting capacity, and the tightness is expected to persist in 2025.
The copper concentrate deficit is expected to widen to 950,000 tons in 2025 from 1,600 tons in 2024, according to analysts at Benchmark Mineral Intelligence (BMI).
(Editing by David Evans)
https://www.mining.com/web/antofagasta-agrees-copper-treatment-charge-with-jiangxi-copper-sources/
Copper's Role in the Energy Transition + LBC's Drilling
As the world accelerates toward clean energy, copper's role as a cornerstone metal in renewable technologies and electrification has never been more critical.
Speaking at the Resourcing Tomorrow conference in London on December 3, 2024, Barrick CEO Mark Bristow emphasized an urgent copper supply gap looming as early as 2026.
Source: https://www.mining-technology.com/news/resourcing-tomorrow-copper-deficit
Bristow called for bold strategies, including new exploration initiatives, to ensure long-term copper availability. Against this backdrop, exploration companies like Libero Copper & Gold Corporation (Ticker: LBC.v or LBCMF for US investors) are emerging as important players in addressing this challenge.
Libero Copper is advancing the Mocoa porphyry copper-molybdenum deposit in southern Colombia, part of the prolific Jurassic Copper Belt. This flagship asset is poised to contribute to future copper supply.
The company's ongoing 14,000m exploration program combines infill, step-out, and regional drilling to expand resources, test new targets, and refine the geological understanding of one of South America's most promising copper deposits.
High-priority zones such as Piedralisa, Neblina, and Silencio, identified through advanced geophysical and geochemical analysis, are being drilled for the first time.
The Mocoa deposit, discovered in 1973, has demonstrated high potential. Historical drilling has intercepted notable grades, including 0.58% CuEq over 1,228.5m, with higher-grade intervals of 0.72% CuEq over 840.3m.
The current program builds on this legacy, integrating two years of groundwork such as geological modeling and geophysical surveys to unlock the resource’s full potential.
Libero Copper’s efforts align with broader trends in the copper industry, underscoring the need for innovative exploration and sustainable development.
Backed by strategic partnerships and a clear commitment to environmental stewardship, the company is positioning the Mocoa project as a cornerstone for future copper supply.
For more details on the drill program, visit:
https://www.liberocopper.com/_resources/news/nr-20241106.pdf
Posted on behalf of Libero Copper & Gold Corp.
https://stockhouse.com/companies/bullboard?symbol=v.lbc&postid=36346226
The art of stock investing lies in identifying the right equities to buy. One effective approach is focusing on core economic sectors – industries that sustain the foundations of modern life. Among these, basic commodities like steel play a crucial role, serving as the building blocks of countless essential activities.
While steel is highly cyclical, it’s also a key material in multiple essential industries – the automotive, machinery, and construction markets, to name just a few, all depend on steel. This makes steel manufacturers a sound choice, especially when the economic forecasts start looking up.
This is the background behind Goldman Sachs’ current take on the industry. “In our view, the prevailing sentiment towards the US steel industry seems pessimistic given concerns on global over supply and weak but improving pricing,” firm analyst Mike Harris opined. “We are more positive given our belief that both cyclical (e.g., steady demand and lower interest rates) and structural (e.g., fiscal stimulus and favorable trade policy) factors could drive earnings growth for the domestic steel industry despite a weaker global backdrop.”
Harris follows that ‘more positive’ belief to make positive calls on two steel stocks in particular, suggesting that investors treat them as ‘Buys’ amid an improving fundamental situation. We’ve used the TipRanks database to uncover what sets these names apart. Here are the details.
Cleveland-Cliffs (CLF)
The first stock on our list here is Cleveland-Cliffs, the largest producer of flat-rolled steel in North America. The company is the third-largest steel firm in the US, and in addition to flat-rolled steel, its product line includes steel products such as electrical steel, plate, carbon, and stainless. Furthermore, the company is the largest supplier in the US market for automotive-grade steel products and offers hot and cold stamping and tooling solutions.
Cleveland-Cliffs traces its roots back to 1847 and is still based in Cleveland, Ohio. The company is involved in all aspects of the steel industry, not just the finished products; this includes mining the iron ore, producing the pellets and reduced iron needed as the base for steelmaking, and processing ferrous scrap for steel recycling. The company employs approximately 30,000 people and operates across the US and Canada.
Recently, Cleveland-Cliffs completed its acquisition of the Canadian steel firm Stelco. Stelco will continue to operate as a wholly-owned subsidiary; Cleveland-Cliffs paid $2.8 billion for the acquisition.
Nucor (NUE)
Next up is Nucor, the largest of the US steelmakers. With a market cap of more than $36 billion, the company is significantly larger than Cleveland-Cliffs – although Nucor, founded in 1955, is also significantly younger. The company is a diversified steel and steel product manufacturer, with locations across the US, Canada, and Mexico. On the product side, Nucor is a major supplier of merchant bar and rebar, engineered bar, structural steel components, carbon plate steel, and sheet steel, as well as specialty steel products used in a wide range of industrial and construction applications. In addition, the company is a major processor of steel scrap, a key recycling function in the industry.
Nucor controls its operations from its North Carolina headquarters and operates through a family of brands, all well-known names in the steel and construction industries.
Similar to Cleveland-Cliffs above, Nucor has also seen its earnings and revenues trend down in recent quarters. In the last reported quarter, 3Q24, Nucor predicted that its upcoming Q4 results would continue this trend. The company cited a combination of factors as causing the fall in revenues and earnings, including decreased sales volumes and lower average selling prices which negatively impacted earnings in the steel mills business segment.
We should note, however, that Nucor beat the forecasts at both the top and bottom lines in the 3Q24 financial results. The company’s revenue came to $7.44 billion, which beat expectations by $210 million even as it fell more than 15% year-over-year. On earnings, the non-GAAP EPS of $1.49 was 8 cents per share better than had been looked for.
Goldman analyst Harris lays out why investors should get behind this name. He writes of Nucor, “We are positive on NUE for the following reasons: 1) Given the company’s market leading position in most of its products produced, we believe that NUE is well positioned to leverage any incremental steel demand such as the anticipated rapid growth of data centers; 2) Potential margin uplift of ~260 bps through 2026 driving a CAGR of 15% for EBITDA; and 3) Solid balance sheet with leverage averaging <0.2x over the forecast period, providing future growth optionality.”
Harris puts a Buy rating on NUE shares, along with a $190 price target that implies a 12-month upside potential of 22.5%.
The Street’s analysts have given this stock 10 recent reviews, and their breakdown of 7 Buys to 3 Holds adds up to a Moderate Buy consensus rating. The shares are currently trading for $154.98 and have an average price target of $179.89, suggesting that a share price gain of 16% is in store for the year ahead.
https://finance.yahoo.com/news/goldman-sachs-says-2-steel-110957297.html
By Jessica DiNapoli and Richa Naidu
NEW YORK (Reuters) - Procter & Gamble has overhauled its supply chain for the tiny, extra-thin strips of stainless steel in its Gillette razors to source from India, a move expected to help protect its margins from any tariffs U.S. President-Elect Donald Trump may impose.
The stainless steel the Gillette-brand razor maker uses is highly specialized to prevent nicks and cuts and is only produced in large quantities by a handful of companies, none of which are located in the U.S., P&G has told the U.S. Commerce Department in public filings.
A Reuters analysis of import records over the past four years shows that P&G has shifted where it buys the stainless steel for its top grooming brands in the United States, its biggest market, to a cheaper Indian manufacturer, a move that may help it offset higher costs in Trump's second term.
The Cincinnati-based company now primarily obtains the steel for Gillette from New Delhi-based Jindal Stainless, according to the U.S. import records for P&G subsidiaries, including Gillette.
Investors view P&G as a top operator in the competitive consumer products industry, with its margins exceeding those of rivals like Kimberly-Clark.
It's a pattern P&G hopes to keep after Trump takes office in early 2025. During his first term, P&G faced $1.4 billion in external costs including tariffs that ate into profits.
A P&G spokesperson confirmed that the company has worked with Jindal, adding that details of its relationships with business partners are competitively sensitive. A spokesperson added that "it would not be accurate to point to cost as the sole driver of any sourcing decision."
Previously P&G bought mostly pricier Japanese and Swedish steel for Gillette, according to the import records, provided exclusively to Reuters by ImportYeti. Hefty tariffs during Trump's first term added to the costs of Japanese and Swedish steel, although P&G eventually secured an exemption from them.
Trump, who has said "tariff" is his favorite word, has pitched a fresh roster of tariffs, targeting China, Mexico and Canada, putting consumer-product makers on the defensive.
P&G's Chief Financial Officer Andre Schulten said during meetings with investors on November 21 that the company will have to adjust its supply chain as it sees how Trump implements tariffs. Despite years of underperformance, recent strategies to improve its grooming business have been working, the division's CEO, Gary Coombe, said.
Making steel for shaving razors is labor-intensive, giving Indian manufacturers an edge on cost, said Markus Moll, managing director at Steel & Metals Market Research, an independent market research company. He estimates Jindal's steel is about 20-25% cheaper than competitors.
He added that Jindal has been manufacturing the material for about 15 to 20 years for Indian clients.
Jindal, which says it is the world's biggest maker of stainless steel for razor blades, has mainly supplied non-U.S. markets, an industry executive not permitted to speak to the media, said. Although Jindal has long had a relationship with P&G, P&G's imports from Jindal to the U.S. began in 2022, according to the records from ImportYeti, which compiles bills of lading. P&G imported at least 4,283,569 kilograms (4,721 U.S. tons) of stainless steel from Jindal over the past 36 months, according to the data.
Jindal did not comment specifically on the steel used in razor blades, P&G or its Gillette razors. Abhyuday Jindal, managing director of Jindal Stainless, said in a statement that the manufacturer works with its customers to "create value in their business and using pricing as a lever is our last priority."
Earlier this year, P&G said Jindal was a top supplier that "consistently performed at high levels," according to an internal company blog. The P&G spokesperson said that P&G constantly seeks new suppliers globally that can meet its needs, and that very few do. P&G has not made any substantive changes to its core suppliers, the spokesperson said.
According to the data reviewed by Reuters, P&G has cut back on its imports from Japan's Proterial and Sweden's Alleima. In this year through October, its imports from Proterial were nearly 59% less than in 2023, while P&G has received no steel shipments from Alleima this year, the data shows.
Gillette has been working with Proterial for more than 50 years, and Alleima for over 20, according to filings with the U.S. Commerce Department.
Alleima did not respond to requests for comment. Proterial declined to comment.
Grooming, P&G's smallest business by revenue, has faced years of struggles. During the pandemic, sales declined as men grew beards and shaved less. Before that, start-ups like Dollar Shave Club and Harry's were able to grab valuable market share from pricier Gillette. A four-pack of Gillette Labs Men's Razor Blade refills sells for nearly $29 at Target.com, according to the retailer's website.
https://uk.finance.yahoo.com/news/exclusive-tariffs-loom-gillette-razor-110718610.html
By Rediff Money Desk, New Delhi Dec 05, 2024 21:28
India's Coal and Mines Minister urged the steel sector to reduce dependence on imported coal and adopt technological changes. The minister also expressed optimism about meeting the coal production target for the current fiscal year.
New Delhi, Dec 5 (PTI) Coal and Mines Minister G Kishan Reddy on Thursday urged the steel sector to reduce dependence on imported coal and make the required changes in technology.
Speaking during the launch of eleventh round of commercial coal mines auction, the minister said the import of coal should be reduced in a phased manner. The steel industry uses coking coal.
The minister also expressed hopes that the coal production target of 1,080 million tonnes for the current fiscal year would be met.
To increase coal production "we have to together make efforts", he said. So far, he said, 113 coal mines have been put on sale.
"Today the auction process of eleventh round of commercial coal mines has begun and in the coming days coal block auction will continue," he said.
The 27 coal blocks put on sale in the eleventh round are spread across Jharkhand, Odisha, Chhattisgarh, Maharashtra, Madhya Pradesh, and Arunachal Pradesh and include fully explored as well as partially explored mines and a coking coal mine.
These mines upon operationalisation will generate annual revenue of Rs 1,446 crore and will provide employment to about 19,000 people.
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
Iron ore futures prices slid on Thursday as investor sentiment dampened after state media in top consumer China emphasized qualitative improvements ahead of a long-anticipated meeting that is expected to set the tone for economic growth next year.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 1.17% lower at 800.5 yuan ($110.14) a metric ton.
The benchmark January iron ore (SZZFF5) on the Singapore Exchange was down 1.51% at $103.75 a ton, as of 0700 GMT.
China is not wedded to achieving specific GDP growth rates, and a pace of less than 5% for the economy is acceptable as there is no need for the "worship of speed", state newspaper People's Daily said on Wednesday.
China's Central Economic Work Conference will meet this month, at a yet-to-be-announced date, and top leaders will set economic growth targets and plan next year's agenda.
Investors and traders had been expecting Beijing to roll out more stimulus, said analysts.
"We think iron ore is currently overvalued. Therefore, a downward correction is unavoidable," said Cheng Peng, an analyst at Sinosteel Futures.
The anticipation of growing shipments, driven by rebounding prices and some miners' motivation to meet annual targets, is also weighing on prices, said analysts.
China's Dalian Commodity Exchange said on Wednesday it would lower the daily price limits, or the maximum trading range, to 9% from 11% and adjust trade margins for speculative transactions to 11% from 15%, effective from the settlement on Dec. 6.
"The move will increase speculative transactions, which will likely lift price volatility," analysts at Jinyuan Futures said in a note.
Expectations of winter stocking among steelmakers and resilient demand in winter had pushed prices of the key steelmaking ingredient up by nearly 2% from Monday to Wednesday.
Other steelmaking ingredients on the DCE fell, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 2.42% and 0.96%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were weaker. Rebar RBF1! lost 1.41%, hot-rolled coil EHR1! shed 1.53%, wire rod (SWRcv1) slipped 2.59% and stainless steel HRC1! slid 2.02%.
($1 = 7.2680 Chinese yuan)
(Bloomberg) -- Shares of coal miner PT Adaro Andalan Indonesia jumped by the stock exchange’s limit in their first day of trading, in a show of demand for Indonesia’s largest initial public offering in about a year and a half.
The Jakarta-based company’s stock gained 20% to 6,650 rupiah, versus its IPO price of 5,550 rupiah apiece, in trading Thursday. The surge triggered the exchange’s automatic limit and pushed the miner’s market capitalization to $3.3 billion.
The firm holds the thermal coal assets of PT Alamtri Resources Indonesia — formerly known as PT Adaro Energy Indonesia — which said in September it was separating them to access more sources of financing. Alamtri is one of several Indonesian miners diversifying away from the fossil fuel through investments in metals like nickel, gold and aluminum.
Unlike peers that diversify into green ventures, Adaro Andalan “has no immediate need to follow suit and will continue to operate as a pure-play coal,” analysts at PT Verdhana Sekuritas Indonesia, including Michael Ng, wrote in a note. Verdhana estimates the shares could rise 93% from their IPO price as it fully leverages it cash flow for dividends.
Adaro Andalan’s listing, which raised $272 million, is Indonesia’s largest since gold and copper miner PT Amman Mineral Internasional’s in July 2023. The country’s IPO market has sagged this year amid its presidential leadership transition, with first-time share sales including Adaro raising about $645 million, a far cry from the $3.6 billion raised in all of 2023, according to data compiled by Bloomberg.
The Indonesia Stock Exchange is eyeing 66 IPOs in 2025, IDX President Director Iman Rachman said in an interview last month. More companies are expected to list after uncertainty over the change to new President Prabowo Subianto’s government abates, he said.
The Indonesian sister company of Mr DIY Group (M) Bhd. plans to raise as much as 4.7 trillion rupiah through a listing later this month.
Adaro Andalan recorded a comprehensive profit of $911.2 million for the first half of 2024, according to its prospectus. Its parent company paid a dividend of $2.63 billion last month to encourage shareholders to participate in the listing.
Owners of Alamtri’s stock will have the right to purchase shares in the coal company at a price determined by its trading performance on Thursday, according to its prospectus.
--With assistance from Eduard Gismatullin.
(Adds analysts’ comment and detail on shares move)
COAL: The utilities that co-own a large Wisconsin coal plant delay the facility’s closure for a second time, now planning to shutter the 1,100 MW plant in 2029, allowing time to explore a conversion to natural gas. (Wisconsin Public Radio)
ALSO: A central Illinois coal mine is shutting down after the city of Springfield chose a cheaper supplier for its power plant. (Illinois Times)
GRID: Renewable energy developers say PJM’s proposal to fast-track the interconnection process for shovel-ready projects is a “blatant attempt” to benefit utilities that want to serve surging data center load. (Utility Dive)
Consumer advocates in Illinois and Ohio are also pushing back against the plan that would prioritize natural gas projects, saying PJM has historically overestimated load growth. (E&E News)
CLEAN ENERGY: The U.S. Energy Department office that has approved nearly $55 billion in loans to help clean energy companies scale up is racing to get “dollars out the door” before the Trump administration potentially halts the program. (Canary Media)
PIPELINES: The proposed Summit Carbon Pipeline sparks a backlash in Upper Midwest farm country against “industrial climate solutions” fueled by oil and agricultural interests and federal tax credits. (Drilled)
BIOFUELS: Biofuel advocates and lawmakers are urging the Biden administration to issue guidance on a tax credit for sustainable aviation fuel to end uncertainty for producers. (Iowa Capital Dispatch)
ELECTRIC VEHICLES: Analysts and experts say utilities should scale up time-of-use rates and other programs to help manage load growth from electric vehicles before major investments in distribution infrastructure. (Utility Dive)
Ford Motor Co. reportedly plans to build an EV plant in Indonesia, the world’s largest producer of nickel, as it cuts jobs in Europe and loses market share in China. (Elektrek)
Nearly 15,000 electric vehicles have been registered in Iowa since 2020 as the state’s EV adoption steadily grows. (Cedar Rapids Gazette)
SOLAR: A manufacturer donates 2,000 solar modules to a Native-led nonprofit that will deliver nearly 1 MW of power to Midwestern tribes. (news release)
EFFICIENCY: Illinois issues $285,000 in grants to local governments to support climate action plans as well as efficiency audits and upgrades. (CBS Chicago)
More from the Energy News Network: Midwest | Southeast | Northeast | West
https://energynews.us/newsletter/wisconsin-coal-plant-closure-delayed-again/