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South Korean mills purchase 50,000 T of wheat from the United States
European traders reported that a group of South Korean mills purchased an estimated 50,000 tons of milling grain to be sourced in the United States at an international auction on Wednesday. All wheat was purchased FOB for a shipment between April 15th and April 20th. They said that they believed the seller to be Bunge Trading House. Traders said that the purchase included soft white wheat with a protein content between 9.5% and 11%, bought at a low of $230 per ton FOB. Soft white wheat with 9% was also purchased in the lower $230s per ton FOB. The traders also said that hard red winter grain with 11.5% protein was bought at a price of mid-$250s per ton and dark northern spring flour with 14% protein costing high $270s per ton. The reports reflect the opinions of traders, and additional estimates may be made later. (Reporting and editing by Emelia Matarise, Emelia Sithole Matarise).
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South Korea's MFG bids for 140,000 t corn, traders claim
European traders reported on Wednesday that the Major Feedmill Group in South Korea (MFG) had issued an international tender for up to 140,000 tons of animal feedcorn sourced only from the United States or South America. The deadline to submit price bids in the tender is Friday, February 6. Two consignments of between 55,000 and 70,000 tons each are expected to arrive in South Korea, both in the month of May. Shipping of one consignment to arrive in South Korea on May 5, was requested between April 1-20, if it came from the U.S. Pacific Northwest Coast, between March 12-31, if it came from the U.S. Gulf coast, from March 7-26, if coming from South America, and from March 17-April 5, if coming from South Africa. The second shipment for arrival on May 15 in South Korea is to be shipped between April 11-30, if it comes from the U.S. Pacific Northwest Coast, or between March 12 and April 10 if it comes from the U.S. Gulf. The tender is seeking price offers both in terms of outright cost per ton and freight included (c&f), or at a higher premium than the Chicago May corn contract. Traders said that Asian corn purchases have been slow in the past two weeks due to the Lunar New Year holidays. However, they expect them to pick back up as soon as the holiday period is over. (Reporting and editing by Louise Heavens, Michael Hogan)
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Government advisers predict that Germany will miss its 2030 climate goal.
In a report released on Wednesday, climate advisors for the German government said that it is unlikely Germany will achieve its 2030 climate goals unless major policy changes are made. The independent Council of Experts on Climate Change (which must regularly review the country's performance on climate change) said that Germany will not meet its goal of reducing greenhouse gas emissions to 65% by 2030, compared to 1990. This is mainly due to the transportation and construction sectors. Last year, the council said that Germany would likely miss its binding greenhouse-gas targets. The council stated that, ahead of the national elections scheduled for February 23, the report outlines the requirements of an updated climate action plan that must be presented by a new government within one year after taking office in accordance with the Climate Protection Act. According to the Council, even though greenhouse gas emission has been decreasing recently, and contributing to the achievement of the annual target, the pace must increase by 50% this year in order to reach the 2030 goal. The Council noted that there had been progress made in reducing emissions in the energy sector, and in some cases in the industry which has recently been affected by the energy crisis in Germany and the economic recession. The council said that emissions declined in 2014-2023, compared with 2010-2019. However, the outlook for construction and transportation sectors remains bleak, because too many cars powered by internal combustion engines are still being registered. (Reporting and writing by Andrey Schev, editing by Miranda Murray.)
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Neo-Nazi leader convicted in Baltimore plot to attack power grid
The U.S. Justice Department announced on Tuesday that a neo Nazi leader who was accused of planning to attack Baltimore's electricity grid had been found guilty of conspiracy to damage an energy facility. Brandon Russell, 29 of Orlando, Florida, and an associate, were arrested by the FBI in February 2023, after a confidential informant foiled their plot. The Justice Department stated that evidence presented at the trial revealed that Russell had conspired between November 2022 until that month to attack transformers in electrical substations, "in furtherance his racially- or ethnically-motivated violent extremist views." Russell posted links on open-source maps of infrastructure and explained how a few attacks against substations can cause "cascading failures," according to the Department. The department reported that he recruited a woman from Maryland, Sarah Beth Clendaniel to carry out his attacks to disrupt and damage the power grid of Baltimore, Maryland's biggest city. Clendaniel had identified five substations that she wanted to attack, and Russell tried to get a weapon to her. The department stated that the planned attacks could have caused damages of over $75 million. According to the Southern Poverty Law Center (a civil rights group that tracks hate groups in the United States), Russell is a convicted felon, and the founder of a neo Nazi group called Atomwaffen Division. The group works towards "ushering in the fall of civilization." After pleading guilty, he was sentenced to five-years in prison for possession of a destruction device that had not been registered and improper storage of explosive material. Russell's sentencing is set for June 17. Russell could be sentenced to up to 20 years of prison. Clendaniel received a sentence of 18 years imprisonment in September 2024. (Reporting and editing by Ryan Patrick Jones)
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Keppel's profit increases as demand for data centres rises
Singapore's Keppel reported a 5% increase in its underlying profit for the full year on Wednesday. Its connectivity segment saw its earnings boosted due to strong demand for digital technology required for artificial-intelligence-based services. Keppel’s connectivity segment, where its data centres are operated, saw a net profit increase of nearly 45%. Keppel’s most profitable infrastructure segment saw its profit drop 4%, to S$673m, for the year ended December 31, due to lower gains on sponsor stakes, and lower distributions by Keppel Infrastructure Trust. Net profit for the asset manager from ongoing operations increased to S$1.06 (US$784.20) billion in 2024 from S$1.02 reported a year before. Keppel is transitioning to an asset manager and has a goal of managing S$200 billion in assets by 2030. The company declared the same final dividend as last year, 19 Singapore cents for each share. ($1 = 1.3517 Singapore dollars) (Reporting by Aaditya Govind Rao & Rajasik Mukherjee in Bengaluru; Editing by Rashmi Aich)
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The trade war with China casts a shadow over US LNG projects
Analysts, industry sources and company filings say that President Donald Trump's emerging war of trade with Beijing is a threat to the billions of dollars of planned U.S. LNG export projects. Many of these rely on China to be a major buyer. This threat is a reflection of the dual-edged nature Trump's policies. They are meant to boost U.S. businesses and force action against illegal immigration and drug trafficking, but they could also unintentionally undermine his hopes to vastly expand U.S. Energy output. The tariffs could impact long-term contracts and offtake agreements...and may make it harder for new US LNG project to progress towards Final Investment Decisions," analysts from energy consulting firm EBW Analytics said in a customer note published on Tuesday. They were referring to Beijing’s decision to impose retaliatory duties on U.S. imports of energy. Trump announced over the weekend a 10% tax on Chinese imports, as part of an overall plan to improve U.S. Trade Balance. This triggered retaliation by Beijing, which imposed a 15% duty on U.S. coal and LNG, and a ten percent tariff on U.S. Oil. According to LSEG, the U.S. was the largest LNG exporter in the world last year. China imported nearly 6% of U.S. LNG total exports, or approximately 4.3 million metric tons. According to calculations, Chinese state-owned firms have signed LNG supply contracts for more than 20 million metric tons per annum (MTPA), from existing and future U.S. Export Terminals. According to public announcements, the two largest U.S. LNG companies, Venture Global LNG (formerly Cheniere) and Cheniere, both have long-term agreements with Chinese companies for 14 million MTPA. Venture Global did not respond to comment requests, while Cheniere, and Energy Transfer (which has a long term sales and purchase agreement in China) were also unavailable for immediate comment. Freeport LNG, which is the third largest U.S. exporter of LNG, declined to comment as well. Eight LNG export terminals are currently operating in the U.S. Three more are under construction, and there are nearly 20 others at different stages of development. After the Trump administration lifted the moratorium imposed in January by the former president Joe Biden on new LNG permits due to concerns over the projects' economic and environmental impacts, companies are moving forward with plans for new or increased LNG export capacity. Charlie Riedl is the Executive Director of Center for LNG. This trade group represents many U.S. LNG developers and exporters. He said that China's decision imposes tariffs creates uncertainty in the industry, and erodes America's position on the global energy market. Riedl stated that "These tariffs directly undermine the Trump Administration's efforts to increase American energy exports, and strengthen our influence in the geopolitical arena." White House officials told that Chinese tariffs against U.S. LNG may have a limited economic impact but the risk is worth it. The official stated that "there is no dollar value to saving American lives by preventing fentanyl-related deaths", reflecting U.S. concern over China as a major supplier of the drug and the chemicals used to manufacture it. Officials said that Trump wanted to expand LNG export markets to other countries as well to reduce the risk of Chinese action. BIG CONTRACTS LNG developers use sales and purchase agreements or long-term contracts to secure funding from banks for their projects. These agreements are essential for moving projects through the development phase to a final decision on investment. According to filings by the company, Venture Global, which is the largest U.S. exporter of LNG, with two plants in Louisiana operating and three others under construction, has so far signed supply agreements with Chinese companies totaling 9.5 MTPA. According to Cheniere Energy's announcements, it has 4.5 MTPA of long-term Chinese contracts. This is the second most valuable U.S. gas company, and the current largest exporter. Venture Global warned its investors in the prospectus of its massive initial public offering (IPO) of January that it was exposed to a potential trade war between two of the largest economies of the world. Venture Global informed investors that "These factors may adversely affect our capacity to market the remaining output of our project, which could have an adverse material effect on the viability and profitability of our project." Its stock fell almost 5% during Tuesday's afternoon trading, while Cheniere dropped less than 1%. Curtis Williams reported from Houston; Scott DeSavino, Jarrett Renshaw and Nia Williams contributed additional reporting. Richard Valdmanis edited the story.
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Strait of Hormuz, the world's main oil artery
A U.S. official stated on Tuesday that U.S. president Donald Trump would restore his "maximum-pressure" campaign against Iran and bring its oil exports to zero. Iran has threatened repeatedly to close down the Strait of Hormuz as a response to Western pressure. This would lead to the closure of trade in the region and a rise in oil prices. Here are some details on the Strait of Gibraltar: The Strait is located between Oman, Iran and the Gulf of Oman. It connects the Gulf of Oman in the north with the Arabian Sea to the south. The shipping lane is only two miles wide (three kilometers) in each direction. It's narrowest point is 21 miles wide (33 km). Why does it matter? Around a fifth (or 18-19 million barrels of oil per day) or fuel, condensate, and oil are transported through the Strait. OPEC member Saudi Arabia, Iran and the UAE export the majority of their crude oil via the Strait mainly to Asia. Saudi Arabia and the United Arab Emirates have been looking for other routes to bypass this Strait. The U.S. Government says that existing UAE and Saudi pipelines with unused capacity of 2.6 million bpd could be used to bypass Hormuz. Qatar, which is the largest LNG exporter in the world, ships almost all its LNG through this Strait. This accounts for about a quarter (25%) of the global LNG usage. Iran has repeatedly threatened to close the Strait, but it never did. Fifth Fleet of the United States, based out of Bahrain, has been tasked to protect commercial shipping in this area. History of Tensions In 1973, Arab producers, led by Saudi Arabia and the United Arab Emirates (UAE), imposed an oil embargo against Western supporters of Israel during its war with Egypt. OPEC crude is now mainly purchased by Asia, not the West. In the past two decades, the United States has more than doubled the amount of oil liquids it produces. It is now one of the largest oil exporters in the world. In the Tanker War, which lasted from 1980-1988 between Iran and Iraq, both sides tried to disrupt the other's exports. A U.S. Warship shot down a Iranian airliner in July 1988. Washington claimed it was an accident, while Tehran said that the attack was deliberate. Iran had threatened to close the Strait as a retaliation against U.S. sanctions and European ones. In May 2019, four vessels, including two Saudi oil tanks, were attacked near the UAE coast outside the Strait of Hormuz.
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Venezuelan oil exports increase on Chevron's shipments, with more supplies to China
Data based on vessel movement showed that Venezuelan oil exports increased 15% in January to 867,000 barrels a day. This was due to an increase in shipments from U.S. giant Chevron Corp through its joint ventures and state firm PDVSA as well as more cargoes going to China. Last year, the administration of former U.S. president Joe Biden did not renew an authorization that allowed Venezuela, which was sanctioned, to export oil freely. However, it granted individual licenses for some PDVSA customers and partners, allowing them to export to countries such as India, Europe, and the U.S. Donald Trump said that the U.S. did not need Venezuelan oil. However, his government has made initial contact with Venezuelan President Nicolas Maduro whose reelection was not recognized by Washington. According to LSEG and PDVSA export records, Chevron's exports of Venezuelan crude oil increased to 294,000 bpd by January. This is the highest level since the U.S. manufacturer began shipments of Venezuelan crude under its license at the beginning of 2023. It also exceeds the previous record of 280,000 bpd set in October. Chevron ships all its cargoes to the U.S. to be processed at its refineries or sold to other companies. Last month, China was the top destination for Venezuelan oil with 442,000 barrels per day (bpd), 21% more than the 364,000 barrels per day that were shipped there in December. Venezuelan exports to Europe increased to 63,000 bpd compared to 30,500 bpd a month earlier. Shipments to India remained at 60,100bpd as in previous months. The fuel exports to Maduro’s political ally Cuba fell to less than 10,000 barrels per day (bpd) from 29,000 the previous month. According to an internal document, stable crude processing operations in Venezuela’s largest oil-producing region, the Orinoco Belt contributed to higher exports. The inventories of heavy crude, which is essential for exports in the country, dropped to 6.2m barrels from 7.5m barrels at end-December, and could result in lower exports. Venezuela exported 360,000 tons of oil products and petrochemicals to the world in January, a significant increase from the 209,000 tons it had shipped the month before. According to data, PDVSA, its joint ventures and PDVSA imported 111,000 bpd (billion pounds per day) of heavy naphtha, and other fuels, down from the 130,000 bpd in December.
Gas shipping prices fall due to increased vessel availability
The cost of shipping liquefied gas (LNG), cargoes, has fallen to a five-year low as the number of newly constructed carriers in the global fleet is outpacing shipping demand. Shorter average journey times and increased vessel availability have also contributed to this decline.
According to Spark Commodities, on Tuesday, the Atlantic freight rates for vessels equipped with two-stroke engines and capable of transporting 174,000 cubic meters LNG, which is the most common kind of LNG in the market were $4,250 a day. Spark Commodities' data shows that prices on Friday fell to $3,500 per day, which is the lowest price ever recorded.
Atlantic rates have fallen by over 90% since the beginning of the year.
Spark's data shows that rates for the same ship class on Pacific routes are down by almost half this year. On Tuesday, they dropped to $11,000 per day. This is the lowest rate ever recorded for Spark's dataset, and it is down almost 80% compared to last year.
The global LNG fleet grew in 2024 but LNG loadings only increased by a small amount. This has led to an oversupply as the market awaits a significant increase in LNG export capacities over the next 18-months, said Deng Xiaoyi.
Deng said that shipowners and charterers are in competition to rent out their vessels.
"Firms that have extra shipping capacity are willing to reduce their offers in order to partially recover their operating costs and reduce their losses, rather than idle their vessels."
Atlantic rates for older vessels with tri-fuel engines and 160,000 cubic meters LNG were negative over the past seven days. They hit a record low on Monday of minus 2,750 per day before paring their losses to reach minus 1,000 per day on Tuesday.
Afghan stated that the only other negative rate occurred in February 2022 just before Russia invaded Ukraine. However, this only lasted two days.
He said that "negative round-trip rates" indicate that the shipowner's earnings do not fully cover fuel costs associated with ballasting the vessel back to the loading port for a return voyage in the Atlantic basin.
Sources on the market predicted that LNG shipping costs could continue to decline into 2025 if new tankers are added faster than LNG production increases.
The higher delivered prices in Europe also encouraged U.S. cargoes not to travel to Asia and instead remain in the Atlantic, increasing vessel availability because it results in shorter journey times. In January, at least six LNG cargoes from Asia were diverted to Europe.
The Chinese tariffs on U.S. Liquefied Natural Gas and the record number of newbuild vessels that are due to enter the marketplace this year will compound the effect, said Spark’s Afghan. He added that freight rates may remain at their current levels throughout the remainder of the month.
The U.S. arbitrage market to Asia will remain closed until 2025, according to current estimates. "It would take a significant change in the JKM TTF spread to move this signal from Europe to Asia," said he. He was referring to the difference between the Asia benchmark Japan-Korea Marker price for LNG compared to European gas prices on the Dutch TTF hub.
The TTF price on Tuesday was $15.76 for a million British thermal unit of gas, compared to $14.41 for JKM.
(source: Reuters)