China Starts Buying Oil for State Reserves After Price Crash By Bloomberg


© Reuters. China Starts Buying Oil for State Reserves After Price Crash

(Bloomberg) — China is moving forward with plans to buy up oil for its emergency reserves after an epic price crash, according to people with knowledge of the matter.

The world’s biggest importer is taking advantage of a 60% plunge this year to snatch up cheaper barrels for its stockpiles, a source of considerable speculation in the market because of the government’s reluctance to release information about their formation, size or use.

Beijing has asked government agencies to quickly coordinate filling tanks and using financial tools like options to lock in current low prices, the people said, asking not to be identified because the matter is confidential.

In addition to state-owned reserves, Beijing may use commercial space for storage as well, while also encouraging companies to fill their own tanks, the people said. The initial target is to hold government stockpiles equivalent to 90 days of net imports, which could eventually be expanded to as much as 180 days when including commercial reserves.

China is also planning to announce the fourth batch of strategic reserve sites, the people said. The expansion project has the dual advantage of creating larger emergency reserves and as an economic stimulus project to spur construction opportunities as the country recovers from the coronavirus.

Officials at the National Development and Reform Commission, the top economic planner, didn’t immediately respond to requests for comment.

, the international benchmark, extended gains on Thursday to rise almost 13% to $27.88 a barrel as of 7:08 a.m. in London.

Before the government’s directive was made public, consultancies SIA Energy and Wood Mackenzie Ltd. both estimated that China could probably add 80 million to 100 million barrels to reserves this year before it ran into logistical and operational constraints. According to SIA, China had about 996 million barrels of oil combined in strategic and commercial storage as of March 31.

In September, the head of development and planning at the National Energy Administration said the country had total oil reserves, including strategic stockpiles, for about 80 days. In December, state-owned China National Petroleum Corp. said on its website that the government intends to boost the capacity of its strategic petroleum reserves to 503 million barrels by the end of this year, an indicator of the maximum amount the government can store.

The U.S. currently holds about 635 million barrels in its Strategic Petroleum Reserve, according to government data. A Trump administration plan to buy more oil for the national stockpiles was thwarted last month after Democrats blocked a request for funds.

(Updates with oil prices in seventh paragraph)

©2020 Bloomberg L.P.

 

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China says to ease car buying curbs to boost sales By Reuters


© Reuters.

BEIJING (Reuters) – China’s commerce ministry will relax or remove restrictions on car purchases in some regions to help sales of new vehicles, while accelerating plans to boost the scrapping of old ones.

Wang Bin, the deputy head of the ministry’s consumption promotion division, said the ministry will continue to help “realize the consumption potential” in the world’s largest auto market, during a weekly briefing held online on Thursday.

China’s auto industry suffered a 79% drop in sales in February and expects a fall of around 10% in the first half of this year.

While the coronavirus outbreak has been mostly contained at home, Liu Changyu, another senior commerce ministry official, said, its spread overseas will inevitably impact China’s auto trade and its supply chain.

The ministry will therefore guide Chinese automakers to expand orders from overseas suppliers, stock up on inventory and make alternative plans, Liu said.

 

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Asia shares make cautious gains, investors eye China PMI By Reuters


© Reuters. Passersby wearing protective face masks are reflected on a screen displaying stock prices outside a brokerage in Tokyo

By Wayne Cole

SYDNEY (Reuters) – Asian share markets managed a tentative rally on Tuesday after European and U.S. equities stabilized, though buying for month and quarter-end book balancing likely flattered the gains.

There were also hopes a survey of Chinese manufacturing due later would show a sizable improvement for March as factories began to re-open.

Forecasts are that the China’s official purchasing manufacturers’ index will bounce to 45.0, from a record-low 35.7 in February.

Analysts cautioned the result could even be higher given that the index measures the net balance of firms reporting an expansion or contraction in activity.

If a company merely resumed working after a forced stoppage, it would read as an expansion without saying much about the overall level of activity.

In any case, calmer markets globally helped MSCI’s broadest index of Asia-Pacific shares outside Japan () rise 0.7%. Japan’s Nikkei () edged up 0.2% and South Korea () 1.4%.

E-Mini futures for the S&P 500 () added another 0.3%, supported by talk of book-keeping demand.

“It’s month-end rebalancing, whereby balanced funds now underweight equities versus fixed income given this month’s valuation destruction, need to buy stocks to get back into balance,” analysts at NAB said.

Healthcare had led Wall Street higher, with the Dow () ending Monday up 3.19%, while the S&P 500 () gained 3.35% and the Nasdaq () 3.62%. ()

News on the coronavirus remained grim but radical stimulus steps by governments and central banks have at least provided some comfort to economies.

Infections in hard-hit Italy slowed a little, but the government still extended its lockdown to mid-April. California reported a steep rise in people being hospitalized, while Washington state told people to stay at home.

Trade ministers from the Group of 20 major economies agreed on Monday to keep their markets open and ensure the flow of vital medical supplies.

OIL PRICES OVERWHELMED

Portfolio management also played a part in the forex market where many fund managers found themselves over-hedged on their U.S. equity holdings given the sharp fall in values seen this month, leading them to buy back dollars.

That saw the euro ease back to $1.1030 (), from a top of $1.143 on Monday, while the bounced to 99.207, from a trough of 98.330. [USD/]

The Japanese yen continued to attract safe-haven demand of its own, which left the dollar at 108.08 and off last week’s peak at 111.71.

Oil prices plunged to the lowest in almost 18 years on Monday as lockdowns for the virus squeezed demand even as Saudi Arabia and Russia vied to pump more product. [O/R]

In a new twist, U.S. President Donald Trump and Russian President Vladimir Putin agreed during a phone call on Monday to have their top energy officials meet to discuss slumping prices.

“However, the reality is that the level damage to demand is likely to overwhelm any production cut agreement between major producers,” wrote analysts at ANZ in a note.

“The lockdown of cities around the world and the shutdown of the aviation industry will cause a fall in demand the industry has never seen before.”

Prices did at least try and steady early Tuesday, with U.S. crude () up 56 cents to $20.64. Brent crude () futures gained 25 cents to $23.01 a barrel.

In the gold market all the talk has been of a rush of demand for the physical product amid shortages in coins and small bars. Flows into gold-backed ETFs have ballooned by $13 billion so far this year, the most since 2004.

The metal was holding at $1,616 an ounce , well up from a low of $1,450 touched early in the month. [GOL/]

Graphic: Asian stock markets https://product.datastream.com/dscharting/gateway.aspx?guid=516bc8cb-b44e-4346-bce3-06590d8e396b&action=REFRESH



Binance Academy Launches Blockchain Accelerator in China By Cointelegraph


Binance Academy Launches Blockchain Accelerator in China

Binance Academy, the educational arm of leading crypto exchange Binance, announced the establishment of a blockchain research institute in Shanghai on March 30.

The Lingang Blockchain Technology and Industry Research Institute is intended to operate as a think-tank and talent hub for distributed ledger technology (DLT) innovation in China.

Continue Reading on Coin Telegraph

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Exclusive: Venezuela in talks with China over support amid pandemic, oil price drop


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© Reuters. FILE PHOTO: China’s President Xi speaks with Venezuela’s President Maduro in front of a statue of Venezuela’s late president Chavez during a ceremony in Caracas

2/2

By Corina Pons and Mayela Armas

CARACAS (Reuters) – Venezuela has opened talks with China over possible financial support to cope with a sharp drop in oil prices and the arrival of the novel coronavirus, four sources familiar with the negotiations said.

The government of President Nicolas Maduro is hoping to renegotiate oil-for-loan deals agreed nearly 15 years ago under late socialist leader Hugo Chavez, when the two nations developed an economic alliance built around oil shipments.

China halted new loans several years ago as Venezuela’s economy descended into a hyperinflationary collapse, but Beijing has maintained diplomatic ties with Caracas and openly opposes Washington’s oil sanctions against Maduro.

The talks were initiated by Maduro’s government and are ongoing, the sources said.

“Without (China), we are left helpless,” said one of the sources, who asked not to be identified because they are not allowed to speak publicly about the issue.

Venezuela’s information ministry and China’s embassy in Caracas did not respond to emails seeking comment.

Venezuela is considered to be highly vulnerable to coronavirus due to constant blackouts in many parts of the country as well as the lack of running water and medical supplies in public hospitals.

Maduro has called for U.S. sanctions to be lifted to improve the country’s health system.

Last week, his government asked the International Monetary Fund (IMF) for $5 billion in financing to confront the virus – a request that was flatly rejected, as several member governments including the United States, recognize opposition leader Juan Guaido as Venezuela’s rightful leader.

Maduro’s government is instead counting on significant support from China, said the sources, adding that Maduro had already begun talks with Beijing when he made the request to the International Monetary Fund. Caracas has no official channel of communication with the multilateral lender, the sources said.

The IMF did not respond to a request for comment.

Maduro’s government is seeking a grace period on loan payments, one of the sources said, possibly one that is similar to an arrangement created in 2016 under which Venezuela for over a year made interest-only payments on the loans.

The government is also interested in continuing to import food from China in exchange for oil to overcome the complications caused by the measures of the government of U.S. President Donald Trump, another source said.

Between April and December 2019, at least 40% of food imports by Venezuelan state entities came from China, according to port data seen by Reuters.

The imports primarily comprised staple items such as milk, oil, and meat that are used in the government’s food distribution programs.

Venezuela owes $3 billion in oil shipments to China this year based on current prices, according to one of the sources, equivalent to a quarter of the value of its 2019 crude exports.

China since 2007 has lent Venezuela more than $50 billion. The total outstanding dropped below $20 billion within the last five years, but state oil company PDVSA no longer publishes the pending balance.

PDVSA did not respond to a request for comment.

Last year, Venezuela began accumulating funds in China thanks to payments in yuan for oil exports, and the government last year discussed using yuan to pay contractors. [nL1N2871PK]

Maduro last week said Venezuelan began receiving medical supplies from China to fight coronavirus, which the sources said were being provided independently of the current talks.

(Reporting Mayela Armas and Corina Pons, writing by Brian Ellsworth; Editing by Marguerita Choy)



China to stimulate private investment, accelerate ‘new infrastructure’ development By Reuters



BEIJING (Reuters) – China will cut fees on a large scale to stimulate private-sector investment and also accelerate the development of “new infrastructure” to help spur the economy, Chinese government officials said on Saturday.

China will further develop 5G, construct more data centers and build smart cities as part of the new infrastructure push, Zheng Jian, an official at the National Development and Reform Commission (NDRC), said at a briefing.

Another NDRC official, Hong Ou, said 89.1% of major infrastructure and natural resources projects had resumed operation as of March 20, excluding Hubei province, the epicenter of the country’s coronavirus outbreak.

A total of 1.848 trillion yuan ($260.47 billion) of local government bonds have been front-loaded so far in 2020, including 1.29 trillion yuan of special bonds, used by local governments to finance infrastructure development, Song Qiuling, an official at the finance ministry, said at the briefing.

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China removes threat of total ban on U.S. poultry if bird flu is found: industry group By Reuters



By Tom Polansek

CHICAGO (Reuters) – China has promised it will not impose a nationwide ban on imports of U.S. poultry if the United States finds cases of avian flu, an industry group said, a policy change that could help Beijing fulfill commitments to buy more American farm goods.

The agreement follows a Phase 1 deal to end a prolonged trade war between the world’s two largest economies and highlights China’s need for more imported meat as it battles a fatal pig disease.

Beijing banned imports of U.S. poultry and eggs in January 2015 because of a U.S. outbreak of highly pathogenic, or virulent, avian flu, closing a market worth $500 million in 2013, according to the U.S. Department of Agriculture.

China lifted the ban in November 2019 as the countries sought to finalize the deal to ease their trade war, benefiting U.S. chicken companies like Tyson Foods (N:) and Pilgrim’s Pride (O:).

“We’ve been waiting for this,” said Jim Sumner, president of the USA Poultry & Egg Export Council, a trade group. “It gives everybody reassurance that we’re not going to see a repeat of what happened in 2015.”

The USDA did not respond to requests for comment about the new agreement over avian flu.

China, in the trade deal signed on Jan. 15, promised to buy at least an additional $12.5 billion worth of U.S. farm products in 2020 and at least $19.5 billion in 2021 over the 2017 level of $24 billion.

The agreement over avian flu reflect Beijing’s “friendly attitude” toward imports, said Li Qiang, chief analyst with Shanghai-based JCI, a leading agriculture consultancy in China.

“It shows that under the initial Sino-U.S. trade deal, China is trying its best to increase imports of U.S. agriculture products, on the precondition of guaranteeing prevention of the disease,” Li said.

Beijing also recently made U.S. poultry eligible for exemptions to retaliatory duties.

If avian flu is found in the United States, China will restrict imports from the state where the case is detected, rather than the whole country, according to the export council. The suspension may be lifted if there are no new cases for three months following the disposal of the last case, the group said.

There will be no trade restrictions for less-virulent cases of low pathogenic bird flu, according to the export council.

The World Organisation for Animal Health (OIE) this week confirmed outbreaks of low-pathogenic flu in turkeys in the U.S. state of North Carolina.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Coronavirus deaths in Italy overtake China as economic damage mounts


LONDON/MILAN (Reuters) – The world’s richest nations poured unprecedented aid into the global economy on Thursday as coronavirus cases ballooned in the new epicentre Europe, with the number of deaths in Italy outstripping those in mainland China, where the virus originated.

With over 242,000 infections and nearly 10,000 deaths, the epidemic has stunned the world and drawn comparisons with painful periods such as World War Two, the 2008 financial crisis and the 1918 Spanish flu.

U.N. chief Antonio Guterres warned that a global recession, “perhaps of record dimensions”, was a near certainty.

“This is a moment that demands coordinated, decisive, and innovative policy action from the world’s leading economies,” Guterres told reporters via a video conference. “We are in an unprecedented situation and the normal rules no longer apply.”

Tourism and airlines have been particularly battered, as the world’s citizens hunker down to minimize contact and curb the spread of the highly contagious COVID-19 respiratory illness. But few sectors have been spared by a crisis threatening a lengthy global recession.

The United States is urging Americans not to travel abroad at all and could announce restrictions at the U.S.-Mexican border on Friday. They would be similar to the closure of the U.S.-Canada border to non-essential traffic.

Markets have suffered routs unseen since the 2008 financial debacle, with investors rushing to the U.S. dollar as a safe haven. Wall Street tried to bounce back on Thursday. The benchmark S&P 500 .SPX closed up 0.5%, still around 30% off highs reached last month. U.S. oil prices posted their largest one-day gain ever, rising 25%. [.N] [O/R]

Policymakers in the United States, Europe and Asia have slashed interest rates and opened liquidity taps to try to stabilise economies hit by quarantined consumers, broken supply chains, disrupted transport and paralysed businesses.

The virus, thought to have originated from wildlife in mainland China late last year, has jumped to 172 other nations and territories with more than 20,000 new cases reported in the past 24 hours – a new daily record.

Cases in Germany, Iran and Spain rose to more than 12,000 each. An official in Tehran tweeted that the coronavirus was killing one person every 10 minutes.

Interactive graphic tracking global spread of coronavirus tmsnrt.rs/3aIRuz7

LONDON LOCKDOWN?

Britain, which has reported 144 deaths, was closing dozens of underground stations in London and ordering schools shut from Friday.

Some 20,000 soldiers were on standby, Queen Elizabeth headed for sanctuary in the ancient castle of Windsor, and the Tower of London was to close along with other historic buildings.

“Many of us will need to find new ways of staying in touch with each other and making sure that loved ones are safe,” the 93-year-old monarch said in an address to the nation.

“I am certain we are up to that challenge,” she added.

Italian soldiers transported corpses overnight from an overwhelmed cemetery in Europe’s worst-hit nation where 3,405 people have died, more than in mainland China. Germany’s military was also preparing to help.

Supermarkets in many countries were besieged with shoppers stocking up on food staples and hygiene products. Some rationed sales and fixed special hours for the elderly, who are particularly vulnerable to severe illness.

Solidarity projects were springing up in some of the world’s poorest corners. In Kenya’s Kibera slum, volunteers with plastic drums of water and boxes of soap on motorbikes set up handwashing stations for people without clean water.

Russia reported its first coronavirus death on Thursday.

A medical worker wearing a protective mask and suit treats patients suffering from coronavirus disease (COVID-19) in an intensive care unit at the Oglio Po hospital in Cremona, Italy March 19, 2020. REUTERS/Flavio Lo Scalzo

Amid the gloom, China provided a ray of hope as it reported zero new local transmissions of the virus, a sign of success for its draconian containment policies since January. Imported cases accounted for all 34 new infections in China.

In the United States, where President Donald Trump had initially played down the coronavirus threat, infections surged with over 11,500 known cases and at least 186 deaths.

Trump has infuriated Beijing’s Communist Party rulers by rebuking it for not acting faster and drawn accusations of racism by referring to COVID-19 as the “Chinese virus”.

“We continue our relentless effort to defeat the Chinese virus,” he said in opening remarks at a briefing on Thursday.

The head of the U.S. National Guard said tens of thousands of its troops could be activated to help U.S. states deal with the outbreak now in all 50 states.

MOTOWN SHUTS CAR PLANTS

In a bewildering raft of financial measures around the world, the European Central Bank launched new bond purchases worth 750 billion euros ($817 billion). That brought some relief to bond markets and also halted European shares’ slide.

The U.S. Federal Reserve rolled out its third emergency credit programme in two days, aimed at keeping the $3.8 trillion money market mutual fund industry functioning. The Bank of England cut interest rates to 0.1%, its second emergency rate cut in just over a week.

China was to unleash trillions of yuan of fiscal stimulus and South Korea pledged 50 trillion won ($39 billion).

The desperate state of industry was writ large in Detroit, where the big three automakers – Ford Motor Co (F.N), General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N) – were shutting U.S. plants, as well as factories in Canada and Mexico. Some automakers have pledged to help manufacture much needed medical supplies.

With some economists fearing prolonged pain akin to the 1930s Great Depression and others anticipating a bounceback, gloomy data and forecasts abounded.

Slideshow (10 Images)

In one of the most dire calls, J.P. Morgan economists forecast the Chinese economy to drop more than 40% this quarter and the U.S. economy to shrink 14% in the next. Ratings agency Moody’s prepared for mass downgradings.

In Britain, small gin distilleries have started producing hand sanitizer amid a national shortage, a trend mirrored across the globe from Australia to the United States.

And Monaco cancelled its showcase Formula One Grand Prix, the most famous and glamorous race on the calendar, in another high-profile sporting casualty of the epidemic.

Reporting by Reuters bureaux around the world; Writing by Marius Zaharia, Andrew Cawthorne, Nick Macfie and Lisa Shumaker; Editing by Mark Heinrich and Bill Berkrot



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Japan’s exports fall, imports from China slump as virus impact widens By Reuters


By Daniel Leussink

TOKYO (Reuters) – Japan’s exports slipped for a 15th straight month in February as U.S. and China-bound shipments declined, suggesting a cooling of business activity in the world’s third-largest economy due to the coronavirus outbreak.

Imports from China fell at their fastest pace since 1986 after the virus, which has killed more than 7,000 people worldwide, led to a widespread shutdown of production in the region’s largest economy.

Ministry of Finance (MOF) data out on Wednesday showed Japan’s exports fell 1.0% from a year earlier in February, dragged by U.S.-bound shipments of cars and metal processing machinery to China.

It was the 15th straight month of contraction, marking the longest such run since a 23-month stretch to July 1987 when the height of the country’s stock market and real estate bubble was not yet reached, Refinitiv data showed.

The fall was also smaller than a 4.3% decline expected by economists, and followed a 2.6% decrease in January.

The data offers the strongest evidence yet of the growing economic impact coronavirus crisis. Many companies complained about the closing of factories in China and declining trade with Asia’s largest economy in a Reuters survey published on Wednesday.

That followed a survey the previous day that showed Japanese business confidence slumped to decade lows in march as the spreading coronavirus outbreak is dealing a heavy blow to Japan’s economy.

By region, Japan’s exports to China fell 0.4% year-on-year in February, dragged down by falling shipments of integrated circuit chip manufacturing parts and ground products for chemicals.

U.S.-bound exports, a key destination for Japanese cars and electronics, dropped 2.6% in February, posting a seventh straight month of declines due to falling exports of 3,000-cc cars and semiconductor production equipment.

Reflecting weak domestic demand, Japan’s total imports shed 14.0%, in line with the median estimate for a 14.4% decrease, dragged down by the sharp drop in imports from China.

Imports from China slumped 47.1% from the previous year, seeing their biggest drop since August 1986, ministry officials said, as the country went into lockdown due to the spreading coronavirus epidemic.

As a result, Japan’s trade balance recorded a surplus of 1.110 trillion yen ($10.34 billion), its largest since September 2007, versus the median estimate for a 917.2 billion yen surplus.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Goldman cuts first quarter GDP estimate for China, sees 9% contraction vs +2.5% earlier By Reuters


Goldman cuts first quarter GDP estimate for China, sees 9% contraction vs +2.5% earlier

BEIJING (Reuters) – Goldman Sachs (NYSE:) cut its estimate for China’s first quarter gross domestic product to a year-on-year contraction of 9% from a previous forecast of 2.5% growth, citing “strikingly weak” economic data in January and February.

China’s factory production plunged at the sharpest pace in three decades in the first two months of the year, data on Monday showed, as the coronavirus pandemic disrupted the world’s second-largest economy.

With the pathogen spreading rapidly in other countries, growth outside of China is expected to slow significantly in the second quarter, with any recovery in Chinese economic activity likely to be constrained, Goldman wrote in a note on Tuesday.

Goldman said it did not expect GDP to return to the pre-virus trend until the third quarter.

It lowered its full-year GDP forecast to 3% growth from a previous estimate of 5.5%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.