Iran’s cutting steel imports, depressing global steel market

Monday, 13 February 2012

Steel exports to Iran, one of the world's top importers of billet used in construction, are grinding to a halt, traders said. "Iran is the only market in the world that can move billet prices and now trading has basically come to a halt," a steel trader based in Britain said.

"Now you can really feel the effects of the sanctions imposed by the U.S. and Europe...It is very difficult to do any business with Iran at the moment," a steel trader at a Swiss metals trading house said. Thanks to large-scale building programs in the last few years, Iran has become one of the top importers of steel billet, a semi-finished long steel product mainly used for construction.

The country imported over 3 million tons of semi-finished steel products in 2010 and almost 2 million of hot-rolled coil, a steel product used in transport, construction, shipbuilding and energy pipelines, according to data from the International Steel Statistics Bureau. Boris Krasnojenov, an analyst with Moscow-based Renaissance Capital, said monthly Iran imports from Russia were over 300,000 tons for most of last year.

"As far as I know, the situation is much worse. Some say CIS mills cut sales 10 times," he said.
The collapse in Iranian imports is depressing international steel billet prices, which fell by about $50 a ton in a month to $560 a ton fob Russia and Ukraine this week. "All volumes from the Caspian Sea will be redirected to the Black Sea," Krasnojenov said. "That is a major problem for Russian steel plants." Russia sends about 15 percent of its total exports to Iran, making it the largest source of foreign steel, but the sanctions are pushing it out of the market.

"Steel demand is pretty strong, the problem is the banking system," said Dmitry Smolin, metals and mining analyst at URALSIB Capital. "Russian banks do not have trading lines with Iranian banks to facilitate rouble transactions." Iran's envoy to Moscow said late last month that Iran and Russia had started using their domestic rial and rouble currencies in bilateral trade instead of the U.S. dollar. However, market players say the dollar shortage is crippling the steel trade.

(sourced Reuters)

India increases Iran oil imports

Monday, 13 February 2012

Iran's crude oil exports to India have increased 37.5% in January. India has increased oil imports from Iran to become the Islamic Republic's largest customer last month, ignoring recent sanctions imposed by US and EU on importing Iran’s oil. According to The Wall Street Journal Iranian crude exports to India rose to 550,000 barrels a day in January, up 37.5 percent from December 2011.

The development, the report said, has partly offset a 50 percent cut in crude exports to China as a result of pricing dispute. China now imports around 250,000 barrels a day from Iran. The news comes despite the West’s rising pressure on Iran to halt its peaceful nuclear program.On the New Year’s Eve, the United States imposed new sanctions against Iran aimed at preventing other countries from importing Iran’s oil and doing transactions with its central bank.

European Union foreign ministers also approved sanctions against Iran’s oil and financial sectors on January 23, including a ban on Iranian oil imports, a freeze on the assets of the country’s Central Bank within EU states, and a ban on selling diamonds, gold, and other precious metals to Tehran.Although financial sanctions have caused problems with regard to payment for Iran’s oil by other countries, they have apparently not been able to deter India.

Iran's Ambassador to India Seyyed Mehdi Nabizadeh said last Tuesday that India had agreed to pay for some purchases of Iranian oil in Indian rupees, a route that would avoid the risk of an interruption in banking transfers. Meanwhile, despite a pledge to find alternative supply sources for Iran’s oil, South Africa has also increased its Iranian oil imports to 100,000 barrels a day, The Wall Street Journal quoted an unnamed informed source as saying.

The US, Israel and their European allies accuse Iran of diversion in its peaceful nuclear program and have used this as an excuse to pass four rounds of international sanctions against the country at the UN Security Council. Refuting the claims, Tehran insists that as a member to the International Atomic Energy Agency and the Nuclear Non-Proliferation Treaty (NPT), it is fully entitled to peaceful applications of the nuclear energy.
Source: Press TV

Moody’s downgrades Europe steel outlook to ‘negative’

Wednesday, 02 November 2011

The international rating agency Moody's has downgraded its outlook for the European steel industry to ‘negative' from ‘stable'.

Moody's stated that it expects steel demand in the EU-27 to decrease by up to four percent in the coming 12 months due to economic uncertainty caused by the European debt crisis, as well as due to weak construction and automotive markets.

According to Moody's, in 2012 profitability of European steel companies will "be no worse than 2010" and demand is expected to improve.

Tags: European Union , steelmaking , economics

Greek referendum threatens new euro zone crisis

Tue Nov 1, 2011

ATHENS (Reuters) - Prime Minister George Papandreou's shock announcement that he will put Greece's bailout to a referendum threatened to intensify the euro zone crisis, and brought complaints in Germany that Athens is trying to wriggle out of the deal.

Euro zone leaders agreed last week to hand Athens a second, 130 billion-euro ($179 billion) bailout and a 50-percent write-down on its huge debt. The price of the package is a program of harsh state spending cuts that have unleashed a tide of anger among Greeks.

Papandreou, whose ruling Socialist party has suffered several defections as it pushes waves of austerity measures through parliament while protesters rally outside, said he needed wider political backing for the fiscal measures and structural reforms demanded by international lenders.

A leader in German Chancellor Angela Merkel's center-right coalition said on Tuesday he was "irritated" by Papandreou's announcement.

"This sounds to me like someone is trying to wriggle out of what was agreed -- a strange thing to do," said Rainer Bruederle, parliamentary floor leader for the Free Democrats.

"One can only do one thing: make the preparations for the eventuality that there is a state insolvency in Greece and if it doesn't fulfill the agreements, then the point will have been reached where the money is turned off."

Analysts said the latest opinion poll showed a majority of Greeks took a negative view of the bailout deal.

The renewed uncertainty will be likely be an embarrassment for G20 leaders in France this week trying to coax China into throwing the euro zone a financial lifeline.

"If there was to be a referendum, we may reasonably conclude that they may not accept the austerity measures. We may conclude that it will bring the pack of cards tumbling down," Howard Wheeldon, senior strategist at BGC Partners in London, said.

Early reactions to the surprise move ranged from accusations that Papandreou was gambling with the country's future and predictions of default, to questions over the legality of the referendum and statements by lawmakers that a "No" vote would force his resignation and early elections.

Nobel prize-winning economist Christopher Pissarides caught the mood of uncertainty: "It is difficult to predict what will happen to Greece if they reject it. It will be bad enough for the European Union and the euro zone in particular, but it will be far worse for Greece.

"In the scenario of a 'No' vote Greece would declare bankruptcy immediately, they would default immediately. I can't see them staying within the euro," he said.

REFERENDUM ON MEMBERSHIP

"The situation is so tight that basically it would be a vote over their euro membership," Finland's Europe Minister Alexander Stubb told broadcaster MTV3.

Greek Finance Minister Evangelos Venizelos also warned citizens that euro zone membership was at stake. "It's crunch time," he told lawmakers on Monday.

"Citizens will have to answer the question: are we for Europe, the eurozone and the euro?"

Early on Tuesday, Venizelos checked into an Athens hospital with stomach pains but was expected to be discharged later.

Analysts were divided over whether Greek voters would accept the deal, but agreed that a damaging month or two of market volatility lay ahead while pollsters repeatedly took the Greek voters' pulse and European leaders looked on nervously.

The immediate market reaction to the announcement was negative, the euro extending losses against the dollar and tumbling more than 2 percent to a session low.

European shares were seen opening lower on Tuesday.

Opposition New Democracy leader Antonis Samaras will visit President Karolos Papoulias on Tuesday to discuss developments and push for snap elections, party officials said.

"Mr. Papandreou is dangerous, he tosses Greece's EU membership like a coin in the air," party spokesman Yannis Michelakis said. "He cannot govern and instead of withdrawing honorably, he dynamites everything."

UP TO THE VOTERS

Papandreou told the Greek voters it was up to them to decide the country's fate.

"We trust citizens, we believe in their judgment, we believe in their decision," he told Socialist party deputies. "In a few weeks the (EU) agreement will be a new loan contract... we must spell out if we are accepting it or if we are rejecting it."

Papandreou, grappling with Greece's worst financial crisis in 40 years, said the referendum would take place in a few weeks. Finance Minister Evangelos Venizelos told Greek TV it would probably be held early next year.

Opposition parties accused Papandreou of looking for a way out for his embattled party by dragging Greece, which has seen violent clashes between anti-austerity protesters and riot police, through a lengthy period of political instability.

"I never expected Papandreou to take such a dangerous and frivolous decision," said Dora Bakoyanni, former foreign minister and leader of the small center-right Democratic Alliance party. "All the international media will say that Greece itself is putting the EU deal at risk."

Greek newspapers on Tuesday also harshly criticized Papandreou for his choice. "More uncertainty is the last thing that Greece needs right now," said conservative newspaper Kathimerini in its lead editorial.

"The country will certainly paralyze amid endless debates -- the government, the state apparatus and institutions won't work," the newspaper added.

Papandreou also said he would ask for a vote of confidence to secure support for his policy for the rest of his four-year term, which expires in 2013.

Analysts said he was likely to win that, despite dissent among his parliamentary team, and parliament officials said the confidence debate would begin on Wednesday, with a vote on Thursday or Friday.

MONEY RUNNING OUT?

Greece is due to receive an 8 billion-euro tranche in mid-November, but that is likely to run out during January, around the time of the referendum, leaving the government with no funds if there is a "no" vote.

Germany issued a statement saying the EU was working hard to put the second Greek aid package in place by the end of the year and had no comment on the referendum.

Swinging opinion polls would leave markets fluctuating and Greece's EU partners dangling.

A survey carried out on Saturday showed that nearly 60 percent of Greeks viewed the agreement on the bailout package as negative or probably negative.

But David Lea of Control Risks struck a more positive note. "It's all in the question. If he can frame it as a sufficiently apple-pie issue, he stands some chance of winning," he said.

Some parliamentarians questioned the legality of the planned plebiscite under the constitution, which does not allow referendums on economic issues, only on matters of great national importance.

The last time Greeks held a referendum was in December 1974, when they voted to abolish the monarchy shortly after the collapse of a military dictatorship.

To be binding, a referendum result requires a minimum 40 percent turnout on issues of "crucial national importance" and 50 percent on a law that has already been voted on in parliament and "regulates a serious social issue," according to legislation enacted this year. It was not clear which option the government would favor.

"If the referendum answer is no, Papandreou has to resign," said Costas Panagopoulos, an analyst at polling firm Alco.

"In the meantime what will happen with the decisions the EU took last week? I cannot understand what the prime minister wants to do."

(sourced Reuters)

EU-27 unemployment rate at 9.7 percent in September

Tuesday, 1 November 2011

On October 31, Eurostat, the Statistical Office of the European Communities, reported that the seasonally adjusted unemployment rate in the European Union member states (EU-27) was 9.7 percent in September this year, rising sligthly from 9.6 percent recorded in August. The unemployment rate in the region was 9.6 percent in September 2010.

Among the member states, the lowest unemployment rates were recorded in Austria at 3.9 percent, in the Netherlands at 4.5 percent and in Luxembourg at 4.8 percent, and the highest rates were seen in Spain at 22.6 percent, in Greece at 17.6 percent (in Q1 2011) and in Latvia at 16.1 percent (in Q2 2011).

Meanwhile, in the US the unemployment rate was 9.1 percent in September this year, while in Japan the unemployment rate was 4.3 percent in August.

Tags: European Union , economics

sourced:steel orbis

Violent anti-austerity protests grip Greek capital

Wed, Oct 19, 2011
By Lefteris Papadimas and Yannis Behrakis

ATHENS (Reuters) - Greek police cleared the square in front of parliament on Wednesday after clashing with black-clad demonstrators during a mass anti-austerity rally called to coincide with a vote on a bitterly resented new round of belt-tightening.

The view of the ancient Acropolis was obscured by smoke from burning piles of rubbish and a bank building was evacuated after being set on fire by molotov cocktails as a strike called by Greece's two main unions degenerated into violence.

Much of the country was shut down by the 48-hour general strike, the largest since the outbreak of the crisis two years ago with government departments, offices and shops closed and at least 100,000 people taking to the streets of Athens.

Prime Minister George Papandreou, trailing badly in opinion polls, has appealed for support from Greeks before parliament votes on the latest measures which include tax hikes, wage cuts and public sector layoffs.

But the mood was furious among demonstrators, fed up after repeated doses of austerity and increasingly hostile to both their own political leaders and international lenders demanding ever tougher measures to cut Greece's towering public debt.

"Who are they trying to fool? They won't save us. With these measures the poor become poorer and the rich richer. Well I say: 'No, thank you. I don't want your rescue'," said 50-year public sector worker Akis Papadopoulos.

The boom of tear gas canisters fired by police rang out, and black clouds of smoke from petrol bombs hung over Syntagma Square, scene of violent clashes between police and demonstrators at anti-austerity protests in June.

The latest outbreak of violence overshadowed the start of a 48-hour strike which shut down government departments, shops and public buildings across the country and which unions said was one of the biggest stoppages in years.

A huge crowd gathered in front of parliament earlier in the day but after hours of confrontation with a hardcore group of mainly younger demonstrators, police cleared the square. Groups of hooded youths continued to clash with police on side streets.

At least seven people were hospitalized, and there were several other injuries reported mainly from breathing problems, minor burns and cuts to the head. There were also serious clashes on major avenues away from the scene of the main rally.

More than 7,000 police had been assigned to Athens to deal with anticipated trouble with hundreds deployed in riot gear near parliament.

RECESSION

Wednesday's action came as European Union leaders were scrambling to settle a new rescue package in time for a summit on Sunday that hopes to agree measures to protect the region's financial system from a potential Greek debt default.

"We are in an agonizing but necessary struggle to avoid the final and harshest point of the crisis," Finance Minister Evangelos Venizelos told parliament. "From now and until Sunday were are fighting the battle of all battles."

Trapped in the third year of deep recession and strangled by a public debt amounting to 162 percent of gross domestic product which few now believe can be paid back, Greece has sunk ever deeper into crisis.

Papandreou's narrow four-seat majority is expected to be enough to ensure the austerity bill goes through, especially given possible support from a smaller opposition group.

But his ruling Socialist party's discipline is increasingly strained with one deputy resigning his seat in protest and at least two others threatening to vote against part of the package dealing with collective wage bargaining agreements.

"It is obvious that society has reached the limits of what it can bear," said PASOK deputy Elpida Tsouri.

After repeated rounds of austerity measures, which have hit middle class Greeks hard, protesters said new cuts would only drive the stricken economy deeper into the ground. Unions urged deputies not to pass the law.

"If they have any humanity, decency, sense of pride and Greek soul left, they must reject the bill," Nikos Kioutsoukis, a top official in private sector union GSEE which is leading the strike with its public sector counterpart ADEDY.

"DEBT MONSTER"

Speaking in parliament on Wednesday, Dimitris Reppas, minister for Administrative Reform, reflected the increasing sense of isolation among many in the ruling party, complaining he felt as though he had been thrown to the lions.

"In government, we often feel like ... we are in the Colosseum, fighting the debt monster while everybody else is just sitting in the stands, watching and commenting," he said.

A first vote takes place late on Wednesday on the overall bill, which mixes deep cuts to public sector pay and pensions, tax hikes, a suspension of sectoral pay accords and an end to the constitutional taboo against laying off civil servants.

A second vote on specific articles is expected some time on Thursday and only after that the bill becomes law.

International lenders, who are providing the funds Athens needs to stay afloat after it was shut out of bond markets last year, have expressed impatience at the slow pace of reform as Greece has slipped behind on its budget targets.

There has been growing talk that Athens should be placed under tighter supervision by EU authorities to ensure it meets its reform obligations.

(sourced Reuters)

Europe warned of systemic crisis over debt

Tue Oct 11, 2011
By Sakari Suoninen and Martin Santa

Frankfurt/Bratislava (Reuters) - Europe's top financial watchdog warned on Tuesday that the euro zone's sovereign debt crisis has become systemic and threatens global economic stability unless decisive action is taken urgently.

European Central Bank President Jean-Claude Trichet issued the dramatic warning as chairman of the European Systemic Risk Board, created to avoid a repeat of the 2008 financial crisis, amid growing fears that Greece will default on its massive debt.

"The crisis is systemic and must be tackled decisively," Trichet told a European Parliament committee in his final appearance before retiring at the end of the month.

"The high interconnectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond."

European banking regulators meanwhile asked banks across the continent to provide updated data on their capital position and sovereign debt exposures to help reassess their need for recapitalisation.

Germany and France, the leading powers in the 17-nation euro zone, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit delayed until Oct. 23.

But they must first resolve differences over how to recapitalise banks, whether to force a Greek debt restructuring or stick to a voluntary deal with private bondholders and how to use the euro zone's rescue fund.

Trichet was speaking before international lenders were due to deliver a provisional verdict on Greece's troubled reform and austerity programme, while the fate of the euro zone's rescue fund hung in the balance in Slovakia's parliament.

Slovak Prime Minister Iveta Radicova raised the stakes in a battle to win approval for new powers for the European Financial Stability Facility by tying the decision to a vote of confidence in her centre-right government.

The small, liberal SaS party, the only member of the five-party ruling coalition which opposes the EFSF, said it would abstain, depriving the government of the votes needed to pass the motion.

EU diplomats expressed confidence that the EFSF agreement approved by the 16 other euro zone countries would eventually be ratified, noting that the Slovak parliament can hold a second vote if ratification is rejected at the first attempt. However, it may bring down the government in Bratislava.

TORTURED PROGRESS

In Athens, inspectors from the European Commission, the European Central Bank and the International Monetary Fund were due to issue a statement after completing an extended review of Greece's tortured progress on its bailout programme.

Anti-austerity protesters blocked ministries and state workers went on strike as Greeks awaited the verdict on whether international lenders will hand over a vital tranche of aid needed to stave off imminent bankruptcy.

The so-called troika is due to send a detailed report to euro zone finance ministers and the IMF board next week, and it was not clear whether Tuesday's statement would contain a clear recommendation on releasing the 8 billion euros the government needs to pay salaries and pensions in November. Its next major debt redemption is due in December.

Speaking shortly before the statement was due, Finance Minister Evangelos Venizelos told a conference: "Greece is and will always be a member of the euro zone, a member of the euro."

Europe's inability to draw a line under the crisis has caused growing international alarm, with Japan weighing in on Tuesday after the United States and Britain pressed EU leaders to take decisive action.

Japan said it would consult with the United States before it considers buying more euro zone bonds. Finance Minister Jun Azumi urged Europe to restore market confidence in the run-up to a Group of 20 finance leaders' meeting in Paris this week.

Azumi repeated that Japan stood ready to buy more euro zone bonds so long as Europe comes up with a solid scheme to solve a crisis that has resulted in financial rescues for Greece, Ireland and Portugal.

Interbank lending rates in Europe continued to rise amid growing concern over European banks' ability to handle the debt crisis, despite the prospect of massive ECB liquidity support.

Three-month Euribor rates , traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, rose to 1.570 percent from 1.567 percent.

Some European banks voiced concern at the prospect of being forced by governments to raise additional capital some say they do not need, possibly taking public money.

Germany's banking association said Europe should look at recapitalisation on a case-by-case basis rather than taking a blanket approach apparently envisaged by Berlin and Paris.

The director of the BDB association, Michael Kemmer, also told ARD television that politicians should stick to a July agreement on voluntary private bondholder involvement in a rescue plan for Greece.

That deal envisaged a 21 percent writedown on Greek debt for banks and insurers that participate in a bond swap to reduce and stretch out Greece's debt burden.

However, German Finance Minister Wolfgang Schaeuble and the chairman of euro group finance ministers, Jean-Claude Juncker, have said that figure may no longer be sufficient and the talks may have to be reopened.

Speaking on Austrian television late on Monday, Juncker refused to rule out a mandatory debt restructuring for Greece, which many market analysts and economists say is bound to happen in the coming months.

Many analysts see the rush to recapitalise European banks as a prelude to an enforced write-down of 50 percent or more on their Greek debt holdings. (sourced Reuters)

Fresh fears of Greek default as Finns hold out in collateral dispute

August 26, 2011
By Riva Froymovich, The Australian

EURO-ZONE policy makers appeared no nearer to settling a dispute over Finland's collateral demands in exchange for participating in a bailout for Greece, raising concerns that Athens may default.

Markets have grown more worried about the potential for a Greek debt default amid an apparent lack of progress in resolving the collateral issue this week.

Finland, meanwhile, shows no sign of backing down.

German Chancellor Angela Merkel also unexpectedly cancelled a trip to Russia in early September to shepherd through parliament a crucial change to the euro-zone bailout fund.

The cancellation comes at a sensitive time for relations with Russia, and amid growing nervousness about dissent within the ranks of her own party over her handling of the euro-zone debt crisis.

"The date collides with the introduction of the (European Financial Stability Facility) treaty into the Bundestag," a German government official said, adding that the chancellor wants to stay in Berlin due to the significance of the issue.

Yields on Greek two-year bonds rocketed to a record of over 43 per cent, according to Tradeweb, and the cost of insuring Greek government bonds against default also rose sharply.

Greek five-year sovereign credit-default swaps were 1.37 percentage points wider at 22.75 percentage points, according to Markit.

No multi-lateral talks on the collateral issue took place Wednesday or Thursday, a person familiar with the situation said, despite an initial intention to hash out an agreement by the weekend.

However, the person didn't rule out the possibility that bilateral talks are under way.

Euro-zone governments are looking into alternative forms of collateral after a cash deal reached earlier between Greece and Finland was rejected by key member countries, including Germany and the Netherlands.

Under terms of that deal, Greece would pay Finland hundreds of millions of euros from its bailout loans as collateral for those same loans at the expense of other euro-zone countries.

Since Finland is set to contribute just 2 per cent of Greece's total rescue package, guarantees from the richer euro-zone nations would be going directly to Finland.

The collateral dispute, if not resolved soon, could derail a second bailout package for Greece agreed by euro-zone leaders on July 21.

Without support from all 17 euro-zone countries, no funds can be released, while changes to the European Financial Stability Facility, the currency bloc's bailout fund, can't go forward either.

At last month's summit, leaders agreed to expand the fund and make it more flexible, so that it could buy bonds on the secondary market and provide credit lines to countries locked out of markets.

National parliaments across the euro area must approve the changes, however, and the collateral issue must be settled before the final EFSF proposal is written.

The European Commission, the EU's executive branch, has asked that all the details for the EFSF legislation be clarified by the end of August.

German officials have said they expect to approve the new EFSF at a cabinet meeting on Wednesday.

A parliamentary vote is likely to take place September 23.

A commission spokesman said that there is no formal deadline for concluding talks.

Still, "it's good for that to be done toward the end of the month," he said.

Germany insists on a solution acceptable to all euro-zone countries.

The International Monetary Fund, which has been contributing to Greek bailout loans, opposes any deal that would threaten its preferred-creditor status, which ensures the fund is always first to be repaid.

Finland said that it continues discussions with Greece and other euro-zone countries to find a solution. Officials refrained from further comment.

"The issue has become so politicised that no one here at the Finance Ministry wants to talk about it at the moment," said Anita Sihvola, a spokeswoman for the Finnish finance ministry.

On Wednesday, Finnish Finance Minister Jutta Urpilainen reiterated that Finland would not take part in the €110 billion Greek ($150bn) bailout unless it obtained collateral.

Finland's policy is partly the result of April's general election, in which support for the True Finns Party, which opposed the Greek bailout, soared to 19 per cent from 4.1 per cent in 2007.

The True Finns finished third, and the election led to a new government coalition of six parties.

Euro-zone officials have indicated they are exploring other forms of collateral, such as state property or other non-cash assets.

But this option would be anathema in Greece, especially as many of the government's assets are already earmarked for privatisation.

The government has strongly opposed any deals that would involve putting up Greek land or real estate as collateral, viewing the step as a threat to the country's territorial sovereignty.

"It seems that a possible outcome is either collateral for all member states or no country will get it," said a second person familiar with the matter.

Poland to introduce coal excise duty

Thursday, 18 Aug 2011

The Polish government has confirmed that it will introduce an excise duty on thermal and coking coal next year.

Finance ministry said that coal producers will pay a duty of about PLZ 1.3 /1GJ from January 1, although the calorific value will determine the amount of tax to be paid.

Poland was previously exempt from the excise duty when it joined the EU in 2004. But the European Commission now wants to introduce new rules for taxing energy products. Coal used for energy production may be excluded from the excise duty, but the details have not been confirmed, according to proposed EU legislation.

It is still unclear whether the excise duty will affect export prices.

A broker said that “As far as we know, Polish coal prices will definitely increase as of January 2012. But it is difficult to speculate whether that will affect export prices.”

(By Argusmedia)

Portugal asks for EU financial aid

Fri, April08, 2011
English.news.cn 2011-04-08 08:25:30

LISBON, April 7 (Xinhua) -- Portugal will ask Thursday for the EU financial aid, said the minister for the presidency of the council of ministers, Pedro Silva Pereira, at the end of the weekly government meeting.

However, Pereira did not specify the amount Portugal will ask for.

"This will depend on the negotiations the government will have with the European authorities. The request the Portuguese government will send to the European Commission and the dialogue we will have with them will establish the instrument and the amount that will be used," he said.

According to the minister, the European Union (EU) authorities and the European Central Bank already expressed their availability to send a joint team to Portugal to start the negotiations.

Due to the fact that Portugal will have general elections in June 5 and the government can not commit the country after that date, the solution should be a short term loan until the new government would be inaugurated. ByXinhua

Libyan gov't seeks solution to crisis: Greek FM

Mon April04, 2011 16:16:23 |English.news.cn

ATHENS, April 4 (Xinhua) - The Libyan government is seeking a solution to the current crisis, said Greek Foreign Minister Dimitris Droutsas on Sunday evening, shortly after Greek Prime Minister George Papandreou held talks with Libyan acting Foreign Minister Abdulati Obeidi in Athens.

"Based on the Libyan envoy's stance it seems that the regime seeks a solution," said Droutsas, stressing that Greece supported from the start of the crisis the diplomatic solution and is always ready to contribute to efforts to restore peace and stability in the area.

Papandreou and Obeidi made no comments to the press, but Droutsas also announced that Libyan Colonel Muammar Gaddafi' s envoy will continue his trip delivering the message from Tripoli to Turkey on Monday and Malta.

Greece will inform its international partners regarding the content of the talks, added Droutsas, stressing that Greece supports the full respect of the UN Security Council' s resolution on the Libyan crisis which seeks the protection of civilians in the country.

Sunday' s meeting with Papandreou was held at a Greek bank' s conference hall in a northern Athens suburb after the request of Libyan Prime Minister Al-Baghadi Ali-Al Mahmudi during a telephone conversation with his Greek counterpart on Saturday.

Greece facilitates support operations of the military intervention in Libya and traditionally maintains good ties with Libya and other Arab countries. Earlier in March another Libyan envoy visited Athens for talks at the Foreign Ministry.

Pressure rising on Europe's nuclear plant owners

Sun Apr 3, 2011 1:45pm GMT

* Some reactors likely to fail stress test - EU's Oettinger
* EU plans crackdown on low insurance costs - magazine
* Germany can do without nuclear power before 2020 -Greens

By Christiaan Hetzner

BERLIN, April 3 (Reuters) - Some of Europe's 143 nuclear reactors are likely to fail a test simulating terrorist attacks, an EU Commissioner said, and others will likely see insurance bills soar as politicians try to tighten regulations.

Following the nuclear crisis in Japan, caused by an earthquake and tsunami last month, the European Union is planning to carry out tests by the year end to assess whether its reactors could survive severe conditions.

The tests would simulate terrorist attacks either via cyberspace or an airplane crash and would focus on the reliability of reactor cooling systems, European Energy Commissioner Guenther Oettinger told German magazine Der Spiegel.

"If it was inconceivable that certain nuclear power plants would be taken off line, then we wouldn't need to even bother with the stress test," he was quoted as saying, disputing speculation the move was merely designed to play well to voters.

Nuclear power is extremely lucrative for utilities, which can earn as much as 1 million euros a day per reactor.

Any shutdowns would likely affect France, where state-owned utility EDF (EDF.PA: Quote) operates 58 reactors. These include two at Fessenheim, its oldest nuclear power plant right on the border to Germany and very close to Switzerland.

Following the catastrophe in Japan, the German government hastily postponed its decision to extend the life spans of the country's 17 reactors and took the seven oldest off-line pending a three-month safety check, prompting a lawsuit by utility RWE (RWEG.DE: Quote) on Friday.

Berlin previously agreed in September to keep the nuclear plants -- operated by RWE, E.ON (EONGn.DE: Quote), EnBW (EBKG.DE: Quote) and Vattenfall [VATN.UL] -- running 12 years longer on average than their original shutdown date.

Chancellor Angela Merkel, a physicist by training, told Bild am Sonntag the abrupt policy flip-flop in nuclear energy stemmed from a re-evaluation of the dangers and had nothing to do with important state elections held last Sunday.

"The catastrophe from Fukushima -- the extent of which we still do not know -- has also changed my personal views on atomic energy and its risks. I too have learned from it," she said in comments published on Saturday.

Merkel will now wait for the reports from Germany's Reactor Safety Commission in mid-May and its Ethics Commission at the end of May before taking a decision whether to keep the seven oldest reactors permanently offline.

FATAL EXPANSION

Separately, WirtschaftsWoche reported Oettinger plans to talk to nuclear power plant operators and insurers in Brussels on Tuesday about harmonising liabilities across the EU, seen as an implicit subsidy for operators in certain countries.

Whereas nuclear power plants are liable under German regulations for damages of up to 2.5 billion euros, for example, those in France can be found only liable for just 91.5 million.

"It is unfair that a nuclear power plant only needs to insure itself against a fraction of its risks." Green European MP Claude Turmes told the business magazine. The party's parliamentary leader in the Bundestag, Juergen Trittin, argued it was possible to shut down all reactors in Germany thanks to an EU commitment to raise the amount of renewables in its power mix to 38.6 percent by 2020.

"Not only can we then replace nuclear power with renewables, but we can also take a big chunk out of our fossil fuel needs as well," Trittin told Frankfurter Allgemeine Sonntagszeitung.

Opponents of a quick exit, though, believe Germany would end up resorting to either burning coal to plug the gap, or import nuclear power from neighbouring countries like France.

Germany's VDMA, which lobbies on behalf of some 3,000 industrial engineers including Siemens (SIEGn.DE: Quote), said that simply boosting the amount of green energy in the country would not suffice for manufacturers.

"A one-sided expansion of renewables would be fatal," VDMA President Thomas Lindner told WirtschaftsWoche.

"We need a secure power supply for our high-precision operations. A power outage for just one millisecond costs my company 20,000 euros."

(Reporting by Christiaan Hetzner; Editing by Erica Billingham, sourced Thomson Reuters)

Libya operation costs Greece 6.5 million euros monthly: official

Wed, March30, 2011 05:51:00

ATHENS, March 29 (Xinhua) -- Greek Defense Minister Evangelos Venizelos said Tuesday that the military operation under way to tackle the crisis in Libya costs Greece some 6.5 million euros ( about 9.15 million U.S. dollars) every month.

Addressing a parliamentary committee over the issue, Venizelos stressed that debt-ridden Greece will continue to undertake its supporting role in the operation which aims to enforce the UN Security Council resolution on the protection of civilians in the war-torn northern African country.

Meanwhile, Greek media reported that aided by the EU's border monitoring agency Frontex, Greece is boosting sea patrols in the Mediterranean Sea in face of a new influx of illegal immigrants from troubled North Africa.

Frontex has been supporting Greek efforts against illegal migration in northern Greece on its border with Turkey since last autumn. Frontex will strengthen its operation around the southern Greek island of Crete and similar operations in Italian waters, according to local media reports.

Over the past few days, at least 5,000 people illegally reached Italy from north Africa and approximately 500 arrived in Malta. (sourced Xinhua)

Power, coal, carbon prices rise on German election

Mon Mar 28, 2011 12:13pm GMT
* 2012 power prices at highest since late 2008
* Carbon, coal gain 2 pct
* Market expects oldest nuclear reactors to stay offline

By Karolin Schaps and Henning Gloystein

LONDON, March 28 (Reuters) - European energy prices jumped on Monday as a key Green Party victory in German state elections underlined concerns that widespread anti-nuclear sentiment may permanently shut Germany's oldest reactors.

German baseload electricity contract for 2012 rose BY1DE-1Y to its highest since before the global financial crisis slashed power prices in late 2008, while the price of coal for delivery into Europe next year ICPAP2YZ2 and for permits to emit climate-warming carbon both rose nearly 2 percent. CFI2Zc1

"The power market is taking the view that certain plants are not coming back. If there is a hard, fast decision (on keeping reactors offline) prices would go in an upwards trend," said Martin Young, Executive Director for Equities Research at investment bank Nomura.

The surge in prices comes after Japan's nuclear disaster prompted Chancellor Angela Merkel to impose a three-month moratorium on her coalition government's decision to extend the lifetime of Germany's nuclear reactors, which helped steer the anti-nuclear Greens to control of Baden-Wuerttemberg at the weekend elections.

Seven nuclear reactors shut down following the moratorium in place until at least June, but German power traders believe the loss in political support for nuclear power in Baden-Wuerttemberg will lead to the permanent shutdown of the two oldest reactors located there -- Philippsburg I and Neckarwestheim I -- and other shutdowns will follow quickly.

"I think this now increases the likelihood that Neckarwestheim I and Philippsburg I do not come back after the moratorium and that the other units are phased out quickly," a London-based energy analyst at an investment bank said.

Environment minister Norbert Roettgen, a close Merkel ally, fuelled the debate on Monday as he called for a quicker shutdown of Germany's nuclear reactors. [ID:nLDE72R0JT]

BULLISH FOR CARBON, POWER

The benchmark contract for EU Allowances CFI2Zc1 rose as high as 17.35 euros a tonne early on Monday, the highest in eight days, while coal prices for year-ahead delivery rose above $130 per tonne, maintaining highs seen last week.

"Getting rid of old nuclear plants means plants will run more coal and gas. That means around 70 million tonnes of extra carbon dioxide will be emitted and carbon is up on this prospect for now. The question is how much is this worth in terms of additional carbon price?" said Emmanuel Fages, analyst at Societe Generale/orbeo.

European Energy Commissioner Guenther Oettinger, who before his position in Brussels was Prime Minister of the state of Baden-Wuerttemberg, also supported the view that coal will act as a substitute to nuclear in Germany.
UTILITIES, RENEWABLES GAIN

Share prices in German utilities rose on the back of high gains in power prices and the prospect that utilities may be able to see higher returns from coal and gas plants to substitute the loss in nuclear capacity. Shares in utility RWE (RWEG.DE: Quote) initially fell on Monday but rebounded later to rise 0.43 percent above Friday's close to 44.88 euro at 1055 GMT on Monday, while shares in E.ON (EONGn.DE: Quote) were down 0.16 percent.

Renewable energy shares in Germany continued their strong gains and the OekoDAX , one of the country's biggest renewable stocks was up 6.5 percent on Monday, while the S&P Global Clean Energy Index .SPGTCLEE was up 1.9 percent.

Renewable stocks have soared since Japan's March 11 earthquake and tsunami which damaged nuclear power reactors and caused radioactive leaks.

The global backlash against nuclear power has boosted the outlook for renewable energy as governments ponder their nuclear options.

The election outcome in Baden-Wuerttemberg on Sunday is likely to mean an end to the 58 year long rule in the state of chancellor Angela Merkel's conservative CDU party.

This is likely to leave the anti-nuclear Green Party in control of the utility EnBW (EBKG.DE: Quote), which operates four nuclear reactors, two each at Neckarwestheim and Philippsburg.

It would be the first time that the Green Party has headed a state government in Germany.

The CDU's pro-nuclear policies, which included buying a majority stake in EnBW last year, were punished by Baden-Wuerttemberg voters after the nuclear crisis in Japan.

The opposition Greens claimed about around 25 percent of the vote and will likely form a coalition with the Social Democrats, who took around 23 percent of the votes.

Euro coal June DES ARA trades at USD 128 per tonne

Monday, 28 Mar 2011

Traders and utilities said that prompt European physical coal prices held steady again on Friday, held up more by strong swaps values than physical demand.

Utility sources said that demand for coal in Europe has shrivelled now that German utilities have bought what they need for the near-term and stockpiles in France, Britain and Scandinavia are fairly high.

A European utility source said that "We're still getting offers of almost every type of coal but there's nowhere to put it even if the discount to API2 drops further and we were tempted to buy.”

Prices of close to USD 130.00 a tonne DES ARA do not reflect the abundance of coal supply in Europe but have been hoisted to that level by strong coal swaps prices.

Traders said that swaps have been reacting more to oil volatility and Middle East unrest plus an improvement in the dark spread the profit to be made from generating using coal as fuel, rather than fundamental factors.

One trader said that "Europe is horrible at the moment. Nobody's buying anything, not even the Scandinavians.”

Low water levels on the Rhine and Danube rivers mean barges carrying coal cannot sail fully loaded. This is also dissuading German buyers from taking more prompt coal at present.

In Asia the market seems to be rebalancing quickly after the initial panic about distressed cargoes as a result of the Japanese earthquake and tsunami. (sourced Thomson Reuters)

World crude steel output climbs 8.8% to 117 mmt in Feb

22 March 2011 at 10:45 IST

BRUSSELS (Commodity Online) : World crude steel production for the 64 countries reporting to the World Steel Association was 117 million metric tons (mmt) in February 2011.

This is 8.8% higher than February 2010, according to a press release.

China’s crude steel production for February 2011 was 54.3 mmt, up 9.7% compared to February 2010. Japan produced 8.9 mmt of crude steel in February 2011, an increase of 5.7% compared to the same month last year. South Korea produced 5.0 mmt of crude steel in February 2011, 25.7% more than February 2010.

In the EU, Germany’s crude steel production for February 2011 was 3.7 mmt, an increase of 7.9% compared to February 2010. Italy’s crude steel production was 2.3 mmt, up 4.9% compared to the same month last year. Spain produced 1.4 mmt of crude steel in February 2011, an increase of 6.4% on February 2010.

Turkey’s crude steel production for February 2011 was 2.5 mmt, an increase of 35.5% compared to February 2010.

The US produced 6.6 mmt of crude steel in February 2011, 5.6% higher than February 2010.

Brazilian crude steel production in February 2011 was 2.7 mmt, an increase of 11.4% on February 2010.

The world crude steel capacity utilisation ratio of the 64 countries in February 2011 was 82.0%, a slight increase from the updated figure of 80.9% for January 2011. Compared to February 2010, the utilisation ratio in February 2011 is 2.7 percentage points higher.
(sourced commodityonline)

Why Ireland should just not pay its debts

Mar7,2011 11:44
By Kathleen Brooks, Director of Research UK,Forex.com

Is default really such a dirty word?

If banks lend people more money than they should, they face the risk of the borrower defaulting on their debts.

So why shouldn’t countries simply not pay?

Default might not be a bad thing, if you are an Irish taxpayer. As the EU authorities debate a long-term solution to Europe's sovereign debt crisis, it might want to consider the benefits of the "D" word and not just rule it out completely for fear it could turn investors off all eurozone assets.

Ireland wasn't fiscally profligate, its banks were. Lax regulatory regimes and a toxic chumminess amongst bank executives and property developers were at the root of Ireland's problems.

Along comes a housing bust, a state guarantee for all bank debt and the next thing you know the sovereign rating is getting cut and the country is cap-in-hand to the IMF and EU bailout fund.

Not their fault

The devastating result is that the Irish public has to pay increasing levels of tax for years to honour its former government's guarantee and take money out of their own pockets to pay the bondholders who chose to invest money in some of world's riskiest banks.

When you lay the argument out like this it seems thoroughly unfair.

Sharing the burden for the banks' mistakes between the Irish taxpayer and the people who lent the banks money in the first place makes sense for two reasons.

Firstly, it would reduce the debt in Ireland's economy and help foster growth over the coming years and, secondly, a default mechanism should help to prevent risk-free lending from distorting financial markets in future.

Not just Ireland that could benefit

This second point could also benefit Greece. Even though the Greek bailout was caused by government spending spiralling out of control, bond holders (who lent the money to them) turned a blind eye.

While the previous government failed to detail the true extent of the budget deficit, an investor could have done some simple research and found that Greece never adhered to the eurozone's fiscal rule that countries should spend no more than 3% more than their GDP in the 15 years leading up to its bailout.

So investors who bought Greek debt did so knowing that the country was flaunting EU fiscal rules. Yet Greece could still borrow money like it grew on trees.

While authorities in Athens need to urgently impose fiscal discipline and change a mind set of government hand-outs and tax evasion that is pervasive in Greek society, bond holders also need to be taught a lesson.

Irresponsible lenders should pay too

Essentially that lesson is that lending to a country is not risk free. As European Union authorities are debating the "grand bargain" and a long-term solution to the sovereign debt crisis this month, they would be wise to seriously consider haircuts (paying less back) and defaults as an option.

The markets might not be as against the idea as some may think. If you know that you could be subject to losses on your debt investment then you can price the risks accordingly.

While it is true that the cost of borrowing will be higher than it was during the boom, it may end up being lower than it is currently, especially for Greece, Ireland et al.

The more formal the process to allow a default the less scary it will be. And these changes could go some way to improving the health of the financial markets too, as they might make investors do more research and price risk according to hard facts, not based on implicit guarantees from the EU that no investor will be subject to a loss.

Investors are in limbo right now. They aren't willing to buy peripheral bonds, not because of the threat of default, but because of the uncertainty about how the sovereign crisis will reach a conclusion.

Reducing the debt burdens of these nations will go some way to doing this. Default might not be such a bad idea after all. More from Forex.com

Japanese-operated vessel freed by pirates - EU

Feb 28, 2011 3:04pm GMT
LONDON Feb 28 (Reuters) - Pirates have released a Japanese-operated cargo ship hijacked last October off Kenya, the European Union anti-piracy force said on Monday.
The EU Navfor force said in a statement the Izumi, operated by NYK-Hinode Line, was released from pirate control on Feb. 25.
It said the Panama-flagged vessel and its Filipino crew of 20 were believed to be making for a safe port, adding that it had no information on the condition of the vessel or the crew.
The 14,000-dwt Izumi had been on route to Mombasa in Kenya carrying a cargo of steel. The Kenya-based East African Seafarers Association said last October Somali pirates had seized the vessel.
Earlier on Monday, EU Navfor said pirates had seized the Greek-owned bulk carrier Dover in the North Arabian sea about 260 miles northeast of Salalah in Oman, taking the 23-strong crew hostage. (Reporting by Tim Castle; editing by Andrew Dobbie, Thomson Reuters)

EUROFER and EU discuss current and future climate and energy policy

Sunday, 27 Feb 2011

On February 9th 2011, Dr Wolfgang Eder president of EUROFER and Mr Gordon Moffat director general of EUROFER met EU energy commissioner Mr Günther Oettinger to discuss the current and future European climate and energy policy.

EUROFER raised its concerns on the implementation of the EU Emissions Trading Directive, the discussions about a unilateral move by the EU beyond its 20% climate target by 2020 and certain aspects of the Energy Efficiency Plan 2011 to 2020 which the Commission intents to adopt beginning of March 2011.

Mr Oettinger stated that he was against moving the EU climate target unconditionally beyond 20% by 2020. He agreed that the international competitiveness of the European industry is at stake.

EUROFER informed the commissioner that the Energy Efficiency Plan or other EU initiatives must not lead to any further legislation for energy intensive industries on top of the EU ETS. There should be no mandatory Eco audit, energy management or eco design requirements on ETS installations as is currently discussed in the Commission.

The costs of energy for large energy consumers and the ETS are sufficient to provide the highest level of energy efficiency. For voluntary agreements, the Energy Taxation Directive should keep the possibility for reduced taxes. This exemption should not be removed in the revised directive, also due to be presented by the Commission in March 2011.

WTO issues ruling on China export restraints

Friday,Feb18,2011

* US, EU, Mexico filed case against China in 2009
* Ruling could set precedent for China rare earth curbs
* Decision expected to be made public by early summer (Updates throughout)

WASHINGTON, Feb 18 (Reuters) - The World Trade Organization on Friday issued a confidential preliminary ruling in a landmark case against China's export restrictions on raw materials used to manufacture steel, aluminum and chemical products.

The United States, European Union and Mexico launched the case in 2009, complaining that Chinese export restrictions on minerals such as bauxite and magnesium discriminated against foreign manufacturers and gave an unfair advantage to domestic producers.

Beijing has argued it needed to restrict exports of the raw materials for environmental reasons.

"Under WTO rules, this interim report is confidential and we cannot comment on its contents at this time," said Nefeterius McPherson, a spokeswoman for the U.S. Trade Representative's Office.

"The report will be made public when it is circulated to WTO members. We currently expect the final report to be circulated sometime in late spring or early summer of 2011," McPherson said.

The United States, EU and Mexico argue that China's export curbs violated both general WTO rules and specific commitments that Beijing made when it joined the world trade body in 2001.

The case does not cover China's export restrictions on rare earth minerals used in smart phones, electric car motors and high-tech industrial equipment which have also raised concern in the United States, EU and Japan.

McPherson said there was still a possibility of the United States filing a WTO challenge on that front.

"We have been and remain very concerned about China's systemic use of export restraints," she said.

A former WTO appellate body judge said the ruling will be precedent-setting.

"If the United States prevails in this dispute it would be a very significant ruling related to increasingly widespread phenomenon of export restrictions in world trade," said James Bacchus, now at Greenberg Traurig in Washington.

If China wins, then "other kinds of export restrictions imposed by China and other countries may be protected by environmental defenses as well," Bacchus said.

China argues that it must restrict the production and export of the raw materials in the WTO dispute and rare earths to protect the environment and conserve its own resources.
(Reporting by Doug Palmer; Editing by Vicki Allen,sourced:Thomson Reuters)