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Source: Ukraine offers Russia a truce on the Black Sea in response to growing food shortage fears
Sources say that Ukraine sent Russia an offer to both countries asking them to stop attacking civilian targets on the Black Sea. Both countries have been warning about threats to food supplies worldwide after weeks of intense strikes against vessels and ports. Sources familiar with the matter said that Kyiv had sent the offer of suspension via a third-party, but Ukraine is still waiting for their response. Both Russia and Ukraine - major players in the global agriculture market - have accused each of intensifying their targeting of agricultural export vessels. Kyiv was forced to find alternative shipping routes when many shipowners stopped stopping at ports in the southern region of Odesa, which is a major grain exporting area. They were wary of Russian strikes on dozens?foreign flagged ships and port infrastructure. Russia didn't immediately make a public comment. Alexander Grushko, the Deputy Russian Minister of Foreign Affairs, said that Moscow had not received any formal ceasefire proposals in the Black Sea before this report. Recently, we've heard many calls for different kinds of truces and moratoriums. The ideas are being presented through different channels, but no formal proposals have been received," he said, according to Russia’s state news agency TASS. Euronext September Wheat?BL2U6 slid lower after the news about Ukraine's bid. Hakan Fidan, the Turkish Foreign Minister, said on Saturday that both Russia and Ukraine had been asked to declare a moratorium in Black Sea attacks. The de facto blockade by Russia of Ukraine's Black Sea ports in Odesa has caused Ukrainian grain exports to fall 76% in comparison to the same period last year. The agricultural sector warns of dire consequences for the Ukrainian economy if the situation continues. Andrew Heavens edited this article.
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The largest grain terminal in Russia, Novorossiysk KSK, has suspended operations
Delo Group, the owner of Russia's KSK grain terminal in the Black Sea port of Novorossiysk, announced on Thursday that it had suspended operations. The decision was taken to ensure the safety of staff and infrastructure, it stated. Ukraine attacked?Novorossiysk ports in a massive drone attack on Wednesday. Two other major grain terminals were?put out of service. Russian Railways, the monopoly railway company in Russia, announced on Thursday that it had limited the loading of cargoes bound for the port of Novorossiysk. According to a document reviewed by the. Novorossiysk’s 'grain' terminals, with a combined capacity of more than?20 millions tons, are the main route for Russian seaborne grains exports. Last season, they reached a record?52.7million tons. (Reporting and editing by David Goodman, Jan Harvey and Olga Popova)
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CK Hutchison’s halted Panama port operation weighs on earnings
?CK Hutchison said that its cargo traffic and 'port earnings were?affected by a halt in operations in Panama. It also added that there had been little progress on a sale of the majority of its ports businesses for $23 billion. Li Ka-shing's conglomerate, owned by Hong Kong’s richest man, Li Ka, is embroiled in a diplomatic dispute since U.S. president Donald Trump objected to Chinese control of ports on the Panama Canal. This was followed by the cancellation by Panama of the concessions it had in the country. CK Hutchison’s ports division reported a 1% decline?in throughput. However, earnings before interest tax, depreciation, and amortization (EBITDA), despite the HK$496?million hit from Panama, rose?4%. Panama Ports Company's (PPC) is seeking more than $2 billion from Panama in damages through arbitration, after being removed from operations at two ports near the Panama Canal for nearly 30 years. The legal battle has complicated the plan of the group to sell dozens ports around the world, including the Panamanian Terminals, to a consortium that includes BlackRock, Mediterranean Shipping Company, and another strategic investor, which sources identified as China's COSCO. Frank Sixt, Group Finance Director at a earnings conference, said that there was "absolutely" nothing to report in terms of the transaction. CK Hutchison's retail business helped to boost the group's underlying profits by 6.7% in the first six months of the year.
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One person killed in blast at Rotterdam Port Energy Facility
Officials said that a blast occurred at a storage area for 'petroleum' products in the?Port of Rotterdam,?the Netherlands, on Thursday. One person was killed and several others were injured. The cause is unknown. Gunvor, a major trading company in energy commodities, said that an "incident occurred"?during the maintenance of a storage tank. Police spokesperson said that no immediate signs of sabotage were present and?that the investigation was looking at all possibilities. Rotterdam, Europe's biggest port, is home to?oil refining facilities?,?liquefied gas terminals? and?multiple chemical plants? Shell, Exxon 'Mobil, BP, and Gunvor Energy, among others, are energy giants that operate at the port. Around 11:30 am (0930 GMT), the explosion took place. Gunvor has said that it is cooperating with the local authorities. Shell stated that the explosion had no impact on its operations at the port. The spokesperson for Rotterdam Port said that the LNG terminals were not affected. Exxonmobil has shut down all of its 191,000 barrels/day Rotterdam Refinery units due to an outage in power, according to a Wood Mackenzie alert sent to customers. Exxonmobil didn't immediately respond to an inquiry for comment. Rotterdam Port said that there was no "connection" between the explosion and the power outage. Reporting by Charlotte Van Campenhout, Inti Ladnauro and Richard Lough. Writing by Richard Lough. Editing by Toby Chopra, Hugh Lawson and Toby Chopra.
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Petronet India says it is unclear about September LNG deliveries from Qatar
Petronet LNG, India's largest gas importer, does not have a definitive liquefied gas supply plan with its main supplier Qatar. This was revealed by its CEO on Thursday as the Middle Eastern producer reviewed force majeure from month to month. In March, Qatar declared force majeure for LNG exports after Iran hit two of Qatar's fourteen production trains. The U.S. - Iran conflict has also 'disrupted fuel shipments via the Strait of Hormuz. This route carries around a fifth of global oil consumption, as well as large quantities of LNG. After Petronet's earnings for the June quarter, A K Singh said to the media: "They haven't given any definite plans for supply of LNG in September." "Everything is tied to the Strait of Hormuz, and their initial?plans." Singh stated that Indian companies import LNG from Oman and the United States, Nigeria, Angola and Nigeria to make up for the shortage of LNG supplies from Qatar. PETRONET STATES FORCE MAJEURE HAS IMPACTED 56 CARGOES TO DATE He said that Qatar declared force majeure for supplies in August. The measure has affected 56 of the company’s Qatari LNG shipments. He said that the Qatar deal allows the delivery of delayed cargoes until April 2028 when the existing long-term agreement ends. Petronet received Qatari LNG cargo last month on the tanker Tembak. Another cargo is due to arrive this month. According to LSEG's trade flows, Petronet's Dahej Terminal is expected to receive a LNG cargo from a vessel Al Gattara loaded with a cargo from Ras Laffan on Sunday. Singh stated that the company has suspended its operations on?its three tankers Disha, Raahi and Aseem which were chartered to?import LNG from Qatar. He said that Petronet would be receiving 600,000 tons of LNG this year from the Australian Gorgon project under its 1.2 million ton per year supply agreement with ExxonMobil. Petronet imports 1,42 million tonnes of LNG per year from the Gorgon Project, where ExxonMobil is a shareholder, as part of a separate, long-term agreement with the U.S. energy giant. (Reporting and editing by Nidhi verma)
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German police confirm that investigation of suspected explosive device found on rail tracks is underway
German police confirmed on Thursday that they were evacuating nearby buildings to allow the explosive item, found on rail tracks in 'the 'Bavarian town Treuchtlingen, to be safely moved. Bavarian police announced on X they were clearing buildings in the area as a precaution. A spokesperson?added two to three homes are being evacuated in order for the object to be moved. The object was discovered in the southern area of 'the Bavarian City. Police also stated on X that experts are analyzing X-rays of the object. The robot is lifting the object to allow for further examinations, it stated. Bild magazine described the object as an elongated metallic object. However, they did not give a source. German authorities have been on high alert for over a week because of an attempted drone attack at Leipzig airport, in eastern Germany. An unmanned aerial device with explosives near the runway was discovered. Treuchtlingen is a city of 12,000 residents located 150 km (93 miles), northwest of Munich.
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Iran and the US claim competing control of Strait of Hormuz
The Strait of Hormuz, the newly appointed head of Iran’s Basij paramilitary group said on Thursday. This was a day after U.S. president Donald Trump claimed that the United States held "total" control of the strategic waterway. Hossein Taeb claimed that the U.S. tried to undermine what he called the Islamic Republic's popular in the region by launching a war in the Strait of Hormuz. However, they were defeated once again despite their claim that Iran had neither an air force or a navy. Taeb told the semi-official Fars News that "Today, you can see that the Strait of Hormuz has been placed under the?management and control of Islamic Republic," adding that Iran is continuing its 'course in total security. The strait was effectively closed after the beginning of the war which began on February 28 with the U.S. and Israeli strikes against Iran. This strait used to be the route through which one fifth of all oil and LNG in the world were shipped. The U.S. then imposed a blockade against Iranian ports and shipping, claiming it would ensure freedom of navigation by vessels traveling to and from non Iranian ports. The two countries signed an interim agreement in June declaring a ceasefire permanent and calling for the return of freedom of navigation to the Gulf. After a few months, the deal collapsed after Iran resumed limited attacks against vessels it claimed were violating the 'agreement'. Washington then re-started strikes in Iran's south provinces to weaken Tehran's capability to target vessels in the Gulf. Rasoul Sanaei Rad, a senior military official, said that Iran wouldn't reopen Strait until the other side met its obligations under the interim agreement. According to Fars News, he added that the U.S. couldn't achieve the reopening unilaterally. Sanaei-Rad warned that Iran will respond more aggressively in a future conflict. He said: "In the event of a future war, Iran will be more aggressive and firmly stand our ground." (Reporting and editing by Dubai Newsroom, Toby Chopra & Sharon Singleton).
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Maguire: The boom in renewables in Europe is causing a fall-off of gas demand.
In recent years, the question that has defined Europe's energy history has been whether there is enough gas in the region. This question is becoming outdated. After the Russian invasion of Ukraine, traders, policymakers and utilities became obsessed with storage levels, LNG cargo arrivals, and winter weather forecasts. Gas inventories were the main measure of Europe's security in terms of energy. A new trend is emerging in the power system of the continent, suggesting that Europe may be increasingly asking the wrong questions. It is not a question of whether Europe will be able to secure sufficient gas. The question is not whether Europe can secure enough gas supplies. The combined electricity generated by Europe's solar and wind farms will surpass the output of gas-fired plants in 2026 for the first time ever. This may seem like another milestone in the clean energy industry. It could be a sign of a major structural change in the European gas market. RENEWABLES ARE NOW THE CENTRE OF ATTENTION Gas used to generate more electricity than the combined output of Europe's wind- and solar-powered fleet. Data from the energy think tank Ember?shows that in 2016, solar and wind combined monthly output generally hovered around 30 to 45 terawatt-hours (TWh), whereas gas-fired production often exceeded 100 TWh. Today, the gap is gone. Solar and wind combined output has increased to 80-110 Terawatt Hours per month, while gas-fired power generation has been steadily losing ground. Renewable generation has been able to match or exceed?gas production for long periods of time in 2025 and 2026. This is not just the result of good weather. Gas-fired power generation in Europe has increased modestly from 250 gigawatts (GW) to 400 GW over the last quarter century. Over the same time period, wind and solar power capacity has risen from 20 GW up to 750 GW. In Europe, wind and solar power is now installed at nearly double the rate of gas-fired power. That distinction matters. Weather can explain temporary shifts in generation. Changes in the footprint of generation fleets drive structural shifts. Europe has been steadily building a power system based on renewable resources, rather than fossil fuels, for the past two decades. After installing sufficient renewable capacity, the decline in fossil?generation is no longer a policy goal but a mathematical result. The data suggests that Europe has crossed this threshold. Fewer months of gas burning Even more interesting are seasonal generation statistics. Gas has historically been the mainstay of Europe's energy system. Demand peaks in winter, but falls in spring and summer. Now wind and solar are increasingly dominating the April-through-October period. By 2026, the renewable energy sector will have reached new highs and coal and gas production will be at multi-year lows. As renewables provide a greater share of electricity, the traditional gas-burning season is getting shorter. This could be a game changer for the gas market. Each month, the use of renewable energy reduces gas consumption and lowers imports of gas. This is a major source of gas demand in Europe. HIDDEN STORAGE STORY Gas inventories may have the most significant impact. Storage has been a crucial insurance policy in Europe since 2022 against disruptions of supply and seasonal demand spikes. If the power sector gas demand continues to shrink, Europe might not need as much gas in storage during summer or as little gas withdrawn during winter. Storage is essential for cold snaps and times of low renewable production. As wind and solar power continue to replace gas, the continent may find that its need for gas inventory is gradually decreasing. The debate is now "How much gas does Europe actually need?" This shifts the debate from "Does Europe have enough gas?" to "How much does Europe really need?" BRIDGE FUEL NOT MORE? The trend is reinforced by the broader historical context. Natural gas has been the main replacement fuel in Europe for power generation and industry since the 1990s. Renewables now pose a similar threat to gas. Years ago, policymakers referred to gas as a fuel that bridged the gap between coal and "renewables". The power system in Europe is increasingly looking like it's approaching the other side of this bridge. Europe does not just produce cleaner electricity with each new wind farm or solar park. It is reducing the amount it has to import, store and burn. For a continent who spent years worrying about whether they would have enough fuel to make it through the winter, the ability to use less gas in the first instance may be the most significant energy development. These are the opinions of the columnist, who is also an author. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. 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Andy Home: Warning lights flash when aluminium reels are impacted by Gulf shock
The Iran War is shaping up as one of the largest?supply shocks' in the history the aluminum market.
According to the International Aluminium Institute, the Gulf's production of this metal, used in sectors such as transportation, packaging and solar panels, plummeted in April to its lowest level for over a decade. The regional run-rates fell by 2 million metric tons annually between March and April.
In missile strikes, two Gulf aluminium smelters were damaged. Al Taweelah, the Emirates Global Aluminium plant in Al Taweelah will require a year to repair. At least one other manufacturer - Qatalum has reduced its capacity.
Major logistical issues are a result of the continued closure of Strait of Hormuz for those who still operate.
The Gulf is the largest non-Chinese producer and a major supplier of goods to Japan, South Korea and the United States.
The London Metal Exchange's (LME) price isn't indicative of the scale of the impact on supply. At $3,650 a ton, it is only up 14% since hostilities began and is still far below the 2022 highs following Russia’s invasion of Ukraine.
The market dashboard is flashing red.
LME TIGHTENS as Stocks DRAIN Away
First, the LME spreads have been sharply tightened.
The benchmark cash-to-3-months spread of the?LME
The LME stock, which was already low, has been raided by traders as they look to fill in the supply-chain gap created due to the loss Gulf production.
Since the start of this year, LME registered stock has fallen by one-third to 339 475 tons. In the last two weeks, almost 68,000 tonnes have been cancelled to prepare for physical loading-out.
The remaining tonnage on the LME warrant now is largely Russian aluminum being stored in South Korea's port of Gwangyang. The sanctions over the Ukraine War have rendered this product useless to U.S. and European buyers.
These daily withdrawals are not transfers to off-warrant stock. The LME's "shadow" stock has also been dwindling and is the lowest it's been since the exchange started reporting off-warrant storage in 2020.
PHYSICAL PREMIUMS SURGE
Second, the increase in physical premiums across the globe is a warning sign.
Since the beginning of hostilities, the CME spot premium has increased by more than twice as much to $316 per tonne over the LME. Japanese buyers accepted a $350 premium for their second quarter deliveries. This is the highest price increase in 11 years.
Since the beginning of March, the European duty-paid premium jumped 58%. The duty-unpaid premium soared 75%.
Due to import tariffs of 50%, the U.S. Midwest premium is up by only a modest 8%. However, American buyers are already paying record prices to secure metal.
The Gulf supply shock is most evident in these manifestations. What is less visible is the situation in segments of the market that are not exchange-traded, such as billets. This product is used by construction and transportation sectors.
Fastmarkets, a price reporting agency, reports that the premium for aluminium billet extrusion in Rotterdam has doubled, reaching $1,100 above the LME base rate.
DEFICIT STRUCTURAL
The relative calmness of the LME's outright price masks a tightening along the processing chain.
While LME traders price in the ebbs and flows of headlines surrounding the Iran War, physical buyers pay?up to secure enough metal on a market heading towards a structural shortage.
Mozal Smelter in Mozambique was closed due to "high energy prices" and this has compounded the loss of production.
According to the latest IAI figures, the combined impact has resulted in a drop of 2.4 million tons in Western production during the past two months. The situation could get worse if the Gulf smelters that are still producing cannot source enough raw material via routes which circumvent Strait of Hormuz.
China's massive?aluminium base has increased production, but it is now close to its government's maximum capacity. There is little room for significant further upside.
The country's exports are likely to increase in response to the Gulf Supply Crisis, but these will be mostly semi-processed metals such as foil, strip and bars, rather than raw material.
The cushion can be a short-term one, but as the Strait of Hormuz is closed, the thinner it becomes.
This is a shock to a market which has been living with structural oversupply for the past 20 years.
Aluminium prices are not yet reflecting the seismic changes that have occurred in the supply chain. However, physical buyers already know the extent of the changes.
Andy Home is a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
(source: Reuters)