Commodities
Scholz confirms Germany’s intention to buy 30% of Uniper shares
Published
2 weeks agoon
By
letizo News
Gas crisis forces EU governments to use this mechanism more and more often.
German Chancellor Olaf Scholz at a press conference in Berlin, said that the German government will buy 30% of the shares of the energy concern Uniper to save the company during the financial crisis amid falling gas supplies from Russia, reports the German newspaper Hadelsblatt.
According to him, the shareholders and the Finnish government have informed the German authorities about the agreement. Uniper shares will be bought back at a face value of 1.7 euros per share, he said. In total, the government will buy back about 157 million common shares worth 267 billion euros.
It is also specified that the German government will finance the company for 7.7 billion euros as part of aid to Uniper in the financial crisis. Also, the state development bank (Kreditanstalt fur Wiederaufbau, KfW) will have to increase the amount of loans from 2 billion to 9 billion euros.
The government also noted that 90% of the additional costs for the company to purchase more expensive energy from other suppliers will be distributed among consumers. The mechanism will come into force on October 1. According to the chancellor, the fee will cost each family of four about 200-300 euros a year.
In early July, Uniper, in which the Finnish company Fortum owned a 78 percent stake, asked the German government for help. After Gazprom cut its gas through Nord Stream by 60%, the company began buying hydrocarbons from alternative suppliers at prices significantly higher than those specified in its contract with the Russian supplier.
Fortum of Finland will hold 56% of the shares and will maintain its status as the power concern’s blocking shareholder upon completion of the deal.
Uniper is the majority owner of the Russian power generating company Unipro, owning 83.73% of its shares. Uniper started the process of selling its stake in Unipro at the end of last year, but it was halted this spring. The company said it would continue the process of selling its stake in the Russian asset as soon as possible.
Uniper is Germany’s largest importer of Russian gas
July 18, Reuters reported that the concern has received a letter from Gazprom with a message of force majeure circumstances on the supply of gas from June 14. The agency specified that Gazprom explained the inability to meet contractual obligations to export gas “extraordinary circumstances beyond its control”. Uniper said the statement was unfounded and officially denied force majeure.
According to Reuters, Gazprom has also sent a similar letter to RWE. In mid-June, exports of Russian gas through the pipeline Nord Stream (55 billion cubic meters of gas per year) decreased by 40% because of problems with the equipment being repaired in Canada. On July 21, Nord Stream resumed its flow, but only 40 percent of the pipeline was used.
The German government is implementing a “soft” nationalization scenario for Uniper
The German government agreed on a project for the nationalization of energy companies back on July 5, which, however, did not point to Uniper directly at that time. Now we are talking about nationalization of the stake in the company with compensation of its value to shareholders. De jure, the transfer of shares in state ownership is formalized as a market transaction, but Uniper could not fail to sell its shares.
Against the background of the energy crisis, similar mechanisms of nationalization of the infrastructure of oil and gas companies may be used in other EU countries in relation to other market players.
In late June, the German Finance Ministry came up with the initiative to nationalize the German part of the gas pipeline Nord Stream – 2 (designed capacity – 55 billion cubic meters per year), reported Spiegel, citing sources.
But the acquisition of Uniper by the German government should be seen more as an anti-crisis management than as a new, deliberate change in state policy. The energy market in the EU in general and Germany in particular is in crisis not only because of the decline of gas supplies from Russia: it is also affected by a sharp increase in spot prices, to which long-term contracts were tied, the lack of available volumes on the market, the decline of own production in the EU and a lot of other factors.
In Europe, spot gas prices remain high. On July 22, the TTF hub in the Netherlands had an August futures price of about $1,700 per 1000 cubic meters.
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Commodities
Copper price chart fluctuates at previous closing levels
Published
4 hours agoon
August 8, 2022By
letizo News
Copper prices chart are fluctuating slightly near the level of the previous close as investors estimate a lot of factors, trading data shows.
September futures on copper on the Comex exchange are getting cheaper by a symbolic 0.01%, to $ 3.5515 a pound.
On the London Metal Exchange (LME) in previous trading, the cost of a ton of copper with delivery in three months increased by 1.85% to $7,870.5; aluminum — by 0.54%, to $2,416. Zinc — by 1.1%, to $3,488.5.
Quotes in the morning do not show any pronounced dynamics for a lot of reasons. For example, the price of copper is affected by the tense situation between the U.S. and China, the largest consumer of this type of industrial metal.
Also, the price dynamics are influenced by macro statistics — exports from China in July jumped by 18% year-on-year, while the forecast growth was only 15%, which, in turn, cut some concerns about the demand for metals in its largest market.
At the same time, investors continue to fear a recessionary economy. Expectations of a further increase in the discount rate by the U.S. Federal Reserve System after the release of data from the labor market in the country have increased fears.
Commodities
Natural gas price in Europe per 1,000 m3 hits $2,100 on the exchange
Published
4 hours agoon
August 8, 2022By
letizo News
Natural gas price Europe per 1,000m3: September gas futures contracts (benchmark TTF) were trading at $2,100 per 1,000m3 on Monday, gaining some 1.6% against Friday’s settlement price in the first hour of trading, London’s ICE exchange data showed.
So far, the current price minimum is $2,056.7 (-0.5% compared to Friday’s settlement price of $2,066.5). The maximum is $2,100 per 1,000m3 (+1.6%).
Last year the European market faced a gas collapse. Experts attributed the collapse to limited supply from major suppliers, low occupancy rates of underground gas storage facilities in Europe, and high demand for liquefied natural gas in Asia.
Right now, Europe continues to be under pressure due to continued supply strains from Russia. Russian gas exports have fallen since the outbreak of the war in Ukraine: shipments via Nord Stream and the Ukrainian gas transportation system have dropped significantly, and the Yamal-Europe pipeline has stopped altogether.
The average monthly settlement price of the nearest gas futures on the ICE increased sharply, by almost 50%, from $1,180 per 1,000m3 in June to about $1,805 in July, while in the middle of summer last year it did not exceed $500. In the last days of July gas quotations reached $2,400 per 1,000m3 for the first time in four months. Such steadily high prices have not been seen in the entire history of European gas hubs since 1996.
Commodities
Price of gold falls on expectations of further US Federal Reserve rate hike
Published
12 hours agoon
August 8, 2022By
letizo News
Price of gold falls: the price of the precious metal on Monday morning slightly decreased on the prospects of further interest rate hikes by the U.S. Federal Reserve, according to trading data.
The December gold futures price on the New York Comex Exchange is down $2.75, or 0.15%, to $1,788.7 a troy ounce. September silver futures went up 0.24% to $19.89 an ounce.
The precious metals market showed a negative trend on Monday morning, fueled by expectations of further interest rate hikes by the U.S. Federal Reserve after the release of the country’s labor market data.
Thus, the unemployment rate in July fell to 3.5% from the June level of 3.6%, while the number of the employed in non-farm industries increased by 528,000. Analysts had expected the figure to remain at June’s level. The increase in nonfarm payrolls was forecast at 250,000.
“Support from geopolitical tensions “was countered by the resilience of the U.S. dollar after the release of a credible U.S. jobs report and hawkish comments from Fed officials,” Ravindra Rao, vice president of commodities at Kotak Securities, told Bloomberg news agency.
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