Tag Archives: China (PRC)

China’s purchase of Iranian oil destroys demand for Brazil, Angolan crude | Instant News

SINGAPORE / Rio de Janeiro, Brazil (Reuters) – China’s record imports of Iranian crude in recent months have squeezed supplies from rival producers, forcing oil sellers from countries such as Brazil, Angola and Russia to cut prices and divert shipments to India and Europe.

FILE PHOTOS: An employee holds a crude oil sample at the Yarakta oil field, owned by Irkutsk Oil Co, in the Irkutsk region, Russia on March 11, 2019. REUTERS / Vasily Fedosenko / File Photo

Iran’s surge in volume shocked markets and has capped global oil prices although the Biden administration is expected to resume talks with Tehran to revive the nuclear deal.

Iranian oil started entering China from late 2019 despite harsh US sanctions, but volumes have started to surge only since late last year as oil rebounded above $ 60 and buyers became emboldened by the prospect of the United States lifting sanctions under President Joe Biden.

China received a daily average of 557,000 barrels of Iranian crude between November and March, or about 5% of total imports by the world’s biggest importers, according to Refinitiv Oil Research, back to levels before former US President Donald Trump reimposed sanctions on Iran. in 2019.

(GRAPH: China’s purchase of Iranian oil returns to pre-US sanctions levels back in 2019 -)

Most of this oil ends up in the eastern province of Shandong, China’s center for independent refineries.

“These ‘sensitive’ barrels are squeezing supply from everywhere, because they are too cheap,” said a Chinese trader handling oil sales to Shandong, referring to Iranian oil that sold $ 6- $ 7 a barrel below from Brazil earlier this year. . .

A second trader said South American suppliers to West Africa and the North Sea were stepping up efforts to find new markets as Chinese demand plummeted.

Major South American exporters Brazil and Angola West Africa were among the hardest hit, while Russia’s eastern grade ESPO crude recorded some of the rare flows to the US that were squeezed by falling Chinese demand.

Shipping from Brazil, which last year overtook Angola as the No. 4 China, thanks to aggressive marketing and attractive prices, fell 36% in January-February compared to last year, although volumes increased 16% annually in March, according to Chinese customs and Refinitiv assessments.

While China’s appetite for Brazilian sweet oil from the Tupi field is “endless” – and Asian nations are still paying dearly for it – the current margins are less competitive, Roberto Castello Branco told Reuters on Sunday, in his final interview before stepping down as Petrobras Chief. Executive Officers on Monday.

India has become a bigger market for oil from Brazil, West Africa and even the North Sea as Chinese demand cools, providing the world’s No. 3 importer with many alternatives as New Delhi cuts Saudi oil purchases.

India’s imports of Brazilian and Angolan crude surged for arrivals from March to May while Europe received more Brazilian oil between March and April than at the start of the year, Refinitiv data show.

The Iranian crude attack, which came as oil from Oman, United Arab Emirates (UAE) and Malaysia, has lowered prices for competing supplies such as Norway and Brazil to multi-month lows, although they have recovered considerably in recent weeks.

(GRAPH: Iran’s surging flows of oil to China reduce supply from Brazil, West Africa and Russia -)

The spot premium for Brazilian Tupi crude shipped to China in May earlier fell to 10 cents a barrel to ICE Brent, down from more than $ 1 a barrel for late December arrivals before returning to 30-40 cents last week.

“China is now looking for light crude oil to blend heavy Iran,” said a second source with a West African producer, adding that they managed to sell just two spot cargoes for May, at slightly better prices than the “bad month” in April.

They can barely compete with Iranian barrels in Brent minus $ 3- $ 5 per barrel.

“China doesn’t want to pay high (prices) with all those sensitive barrels,” said a third trade executive.

However, the surge in Iranian supplies did not affect the market share of Saudi Arabia, China’s main oil supplier, as the OPEC kingpin serves a different client base – Chinese state refiners and large private factories.

With transactions mostly being made in Chinese currency and in some cases end buyers offering open credit, Iranian oil flows are expected to continue, particularly as private companies face less political pressure to exit lucrative businesses.

“Imagine you are a teapot boss, all you care about is whether the oil is cheap enough and if your factory is equipped to process it,” said a fourth trade executive in China.

Additional reporting by Olga Yagova in Moscow, Julia Payne and Alex Lawler in London; Edited by Florence Tan & Shri Navaratnam


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Brazilian meat packers have stopped production because beef prices have soared, domestic demand has shrunk | Instant News

SAO PAULO, April 12 (Reuters) – Brazilian beef packers have halted production at certain locations, as rising costs that cannot be passed on to consumer prices have squeezed margins, industry sources and representatives told Reuters.

Several small, medium and large production facilities have experienced outages or remain unemployed as they match supply to demand, said Paulo Mustefaga, president of the Abrafigo trading group, without providing additional details.

“The price of cattle has increased by about 60% over the year and the industry has been able to pass 40% of the cost well,” said Mustefaga. “This sector is having difficulty making ends meet.”

The 15-kilogram Arroba, Brazil’s benchmark for cattle prices, hit a historic high of 320 reais ($ 55.95) in recent days, driven by low animal supplies and heating demand for Brazilian beef exports, especially from China.

Mustefaga said another factor forcing companies to cut back on slaughter is the decline in the purchasing power of Brazilian families, as the coronavirus pandemic is slowing down Brazil’s already sluggish economic activity.

Brazil’s second-largest meat processor Marfrig, which owns National Beef in the United States, confirmed to Reuters it was sending employees on leave at a unit in the city of Alegrete for 30 days. The slaughtering there resumed on April 1.

The company also said it was temporarily suspending a plant in Rondonia state.

Minerva Foods, South America’s biggest beef exporter, suspended the Mato Grosso state facility and has not set a time to return, sources close to the company said on condition of anonymity.

Last month, Minerva shut down a factory in the state of Sao Paulo for 20 days, but production has now resumed.

Minerva declined to comment. ($ 1 = 5,7193 reais) (Reporting by Nayara Figueiredo Written by Ana Mano Editing by Marguerita Choy)


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German exports rose in February, lifted by Chinese trade | Instant News

FILE PHOTOS: Cars meant for export wait at the port to be loaded as the spread of the coronavirus disease (COVID-19) continues in Bremerhaven, Germany, April 24, 2020. REUTERS / Fabian Bimmer

BERLIN (Reuters) – German exports rose in February, boosted by surging trade with China as a new sign that factories are busy in Europe’s biggest economy despite a pandemic-related drop in overall output in the first quarter expected.

Seasonally adjusted exports increased 0.9% for the month after being revised upward by 1.6% in January, the Federal Statistical Office said on Friday. Imports rose 3.6% after falling 3.5% in the previous month.

A Reuters poll showed exports increased by 1.0% and imports increased by 2.4%. The trade surplus shrank to 19.1 billion euros. This year, exports to China increased by 25.7%.

Separate data released on Friday showed industrial output in February fell by 1.6%. A Reuters poll showed a 1.5% increase.

Written by Paul Carrel, editing by Kirsti Knolle


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The G20 does not discuss extending its debt framework to middle-income countries – the Italian presidency | Instant News

ROME, April 7 (Reuters) – Group of 20 finance chiefs did not discuss expanding the general framework on how to manage debt repayments of poor countries to include middle-income countries, Italian Economy Minister Daniele Franco said on Wednesday.

Italy holds the presidency of the G20 this year.

Speaking to reporters after finance ministers and central bankers met by video conference, Franco also said that the US proposal for a global minimum corporate tax rate was consistent with the work in progress in the G20.

An agreement on this is expected to be reached in July, when the G20 will meet in Venice, Franco said. (Reporting by Gavin Jones and Jan Strupczewski, editing by Angelo Amante)


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Sino-EU relations face challenges, Xi told German Merkel | Instant News

BEIJING (Reuters) – Chinese President Xi Jinping on Wednesday told German Chancellor Angela Merkel Sino-EU relations face “various challenges” and he hopes the 27-nation bloc can “independently” make the right judgment, Chinese state media reported.

In a phone call with Merkel, who has led Germany, the EU’s biggest economy, since 2005, Xi said the EU and China should “respect each other” and “eliminate interference,” according to a reading from the official Xinhua news agency, without specifying the source of the disturbance.

The European Union last month imposed its first significant sanctions against Chinese officials since 1989 for alleged human rights abuses in China’s Xinjiang region. Beijing, which denies the allegations, quickly retaliated by blacklisting several members of parliament and EU entities.

EU allies, the United States, Britain and Canada also sanction Chinese officials over Xinjiang, and the row threatens to derail an EU-China investment pact agreed by the end of 2020 after years of negotiations.

Xi also urged Germany and the EU to make joint efforts with China to maintain a healthy and stable development of bilateral cooperation, according to the readings.

China is willing to work with the international community to promote “fair and reasonable distribution” of the coronavirus vaccine and oppose vaccine nationalism, he added.

Reporting by Beijing newsroom; written by Tom Daly; Edited by Andrew Heavens and Steve Orlofsky


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