Cedric Chehab

“Rising world oil supplies, led by non‑OPEC+ producers, are expected to surpass forecast demand from 2025 onwards. Mirroring demand’s break with long-term trends, a front-loaded build in oil production capacity is forecast to lose momentum and swing into contraction towards the end of our medium-term outlook. A surge in natural gas liquids (NGLs) and condensates will account for 45% of new capacity increases over the forecast period. In a major shift in strategy, Saudi Arabia has put on hold its planned crude oil capacity increase and will now focus on expanding natural gas liquids and condensates, which aligns with its efforts to boost domestic gas supply. It may also reflect an acknowledgment of the rapidly building surplus in global crude oil production capacity. The rise of petrochemicals as the main pillar of global demand growth largely tracks the substantial increase in global supply of NGLs, which are instrumental in their production.” #energy #oil #commodities #commoditytrading #energytransition #shale

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We recently revised up our year-end Selic rate forecast by 75bps to 10.5% and expect no more policy rate cuts from the Brazilian central bank (BCB) until Q1 2025. We make use of a simple monetary policy algebraic exercise to show how politicians' naïve belief that an increase in the central bank inflation target would allow space for a lower policy rate is wrong. We conclude that the BCB will be forced to take a more hawkish tone in its upcoming policy statement this week. We also run a scenario simulation by increasing the inflation target by 1ppt using our policy model. Our results flag a permanent 1.5ppt increase in interest rates by the fifth year, with risks of a policy rate hike in the near term and a temporary decrease in economic growth during the following two to three years. An undesirable outturn that is likely to keep Lula from pursuing it. Read more here: https://lnkd.in/exwJGEGD

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Nickel - Bounce Back No commodity keeps falling forever, and one current case study is nickel. The metal has suffered in price terms from a large shadow of oversupply emanating out of Indonesia. Despite persistent negativity, prices have started to turn, with political unrest in New Caledonia (the world’s number three nickel producer) being a catalyst. Nickel has traded above $21,000 per metric ton yesterday for the first time in about a month. Whether this is a sustained recovery remains to be seen, and there could be more headwinds ahead, but what it does underline is that commodity prices can react very quickly. #commodities #resources #nickel #mining #edenam

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Sarytogan Graphite Limited announces a significant equity investment from the EBRD, enhancing its growth trajectory and operational capabilities. Read More https://lnkd.in/gZacdHHF #EquityInvestment, #EBRD, #cashFlow, #operationalMilestones, #graphiteMining

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World Platinum Investment Council - WPIC® Director of Research Edward Sterck on what needs to happen for #PGM #market conditions to align with new mines: "We expect deficits to deplete above ground stocks and the markets tighten for those underlying fundamentals to become the most important mechanism for establishing value once again." FULL VIDEO: https://lnkd.in/gSTFPSsV #WPIC #ASX #ASXnews #stocks #insights #marketnews Alex Paull

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The dollar value of exports declined across 20 of the top 30 nations last year, amid a surge in trade restrictions. China leads the world in goods exports, but countries like Canada, Brazil, Chile, and Indonesia are increasingly implementing higher tariffs on its products. Refined petroleum, America’s largest goods export, was shipped to 173 countries last year, with the largest importers being Mexico (11%), China (10%), and the Netherlands (9%). In 2023, Taiwan exported nearly $166 billion in integrated circuits, with over half directed to China.

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Thank you #IIGCC and Valentina Ramírez, CFA for inviting me to participate in the Sovereign Bonds and Country Pathways webinar last week. The webinar was a fantastic showcase of the latest work on sovereign transition pathways. While some Emerging Economies are no doubt in the direct firing line if we were to see a fast energy transition, there are others that could potentially benefit. Our Sovereign Transition scatter summarises this idea: 1) High Transition Risk/High Opportunity: South Africa, China, Mexico, Indonesia – transition laggards but clean tech metal producers, whose mining sectors could benefit from more clean tech demand 2) High Transition Risk/Low Transition Opportunity: Gulf economies, Malysia, Vietnam – fossil reliant transition laggards Most Gulf economies look safe for now, given strong macro balance sheets. But a fast transition could force those economies to unload oil reserves quickly, putting pressure on the oil price. Most have an oil breakeven price of > $50/bbl, meaning fiscal budgets are only balanced with a price above that. A fast transition could thus prompt a quickly fall in the oil price, putting debt ratings under pressure. 

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Industrial #Commodity #narratives 5/11/24: - Brent up another close to 3% on weaker US$, OPEC output hike being postponed, chatter of imminent Iranian relation and approach of TC/ Hurricane Rafael - Shell reports clearing non-essential staff from Mars and Vito oil platforms - Expectations of China local Government 'hidden' debt swap plan announcement lifts copper above $9,700 - National People's Congress Standing Committee meeting continues through Friday, with policy hopes lifting iron ore to 3-week high

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(Reuters) - Petrochemical producers in Europe and Asia are in survival mode as years of capacity build-up in top market China and high energy costs in Europe have depressed margins for two consecutive years, forcing firms to consolidate. The sector's weakness is troubling for a global oil industry looking at petrochemicals to keep profits rolling in as transportation fuel demand falls in coming years with the energy transition. 𝐌𝐢𝐭𝐬𝐮𝐛𝐢𝐬𝐡𝐢 𝐂𝐨𝐫𝐩 (8058.𝐓), 𝐢𝐬 𝐰𝐨𝐫𝐤𝐢𝐧𝐠 𝐰𝐢𝐭𝐡 𝐅𝐢𝐧𝐥𝐚𝐧𝐝'𝐬 𝐍𝐞𝐬𝐭𝐞 (𝐍𝐄𝐒𝐓𝐄.𝐇𝐄), 𝐭𝐨 𝐝𝐞𝐯𝐞𝐥𝐨𝐩 𝐫𝐞𝐧𝐞𝐰𝐚𝐛𝐥𝐞 𝐜𝐡𝐞𝐦𝐢𝐜𝐚𝐥𝐬 𝐚𝐧𝐝 𝐩𝐥𝐚𝐬𝐭𝐢𝐜𝐬. 𝐒𝐮𝐦𝐢𝐭𝐨𝐦𝐨 𝐂𝐡𝐞𝐦𝐢𝐜𝐚𝐥 𝐰𝐚𝐧𝐭𝐬 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐬 𝐮𝐬𝐢𝐧𝐠 𝐩𝐨𝐥𝐲𝐦𝐞𝐭𝐡𝐲𝐥 𝐦𝐞𝐭𝐡𝐚𝐜𝐫𝐲𝐥𝐚𝐭𝐞 𝐫𝐞𝐜𝐲𝐜𝐥𝐢𝐧𝐠 𝐭𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐩𝐥𝐚𝐬𝐭𝐢𝐜𝐬 𝐭𝐡𝐚𝐭 𝐡𝐚𝐯𝐞 𝐥𝐞𝐬𝐬 𝐜𝐚𝐫𝐛𝐨𝐧 𝐭𝐡𝐚𝐧 𝐭𝐫𝐚𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐬. https://lnkd.in/gyfXHRtY

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How could commodities shape the future of investment strategies? The person to ask is Mike McGlone. Bloomberg Intelligence’s Senior Commodity Strategist, Mike specializes in analyzing commodity markets and their profound impact on the global economy. Known for his rigorous monthly Bloomberg Commodity Outlook, Mike offers clarity on today’s complex landscape, from energy to metals and agricultural products. His session will shed light on how commodities can impact everything from market cycles to asset allocation, providing invaluable context for both seasoned investors and executive business leaders. With an increasingly uncertain future fast approaching, register now to be part of these crucial conversations. Nov. 21-22. https://lnkd.in/eEbxvqfJ #CrossroadsSummit2024 #Investing #Commodities #Futures

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Industrial #Commodity #narratives 12/7/24: - Despite IEA warning that world oil demand continues to decelerate and that demand increase to average below 1mbpd in 2024 and 2025, Brent closes up 0.5% - JP noting that global oil demand getting a boost from US China air travel and weather related increase in consumption in Middle East - Bloomberg notes temperatures in Poland could reach levels that disrupt refining - Bloomberg notes that "China is typically a massive importer of refined copper, but the country has been exporting the metal in record volumes, unnerving bullish investors" - BHP will shut its nickel business in Australia as a "glut upends the market" - Busy week ahead for iron ore markets with China import data today, steel production Monday, Rio and Vale qtly production report Tuesday, BHP qtly Wednesday plus Third Plenum Monday through Wednesday

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Weak demographics to prolong effects of chem overcapacity Weak growth in the world’s population will slow economic growth, tighten labor markets and likely prolong the global glut in polyolefins, according to ICIS analysts. https://lnkd.in/eeniC5ta #ICIS #ICISanalyitics #economy #EconomicGrowth #Labor #polyolefins #chemicals #chems

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𝗣𝗼𝘄𝗲𝗿𝗶𝗻𝗴 𝗨𝗽 𝘁𝗵𝗲 𝗚𝗹𝗼𝗯𝗮𝗹 𝗦𝗼𝘂𝘁𝗵 Very interesting report on clean energy in EMDEs from RMI with some unexpected insights. I like the graphics (as usual) and how it defines the energy world in four parts: Global North, Greater China, Petro Regions and Global South: ➡️ 𝗧𝗵𝗲 𝗚𝗹𝗼𝗯𝗮𝗹 𝗦𝗼𝘂𝘁𝗵 𝗹𝗮𝗰𝗸𝘀 𝗳𝗼𝘀𝘀𝗶𝗹 𝗳𝘂𝗲𝗹𝘀. With 60% of the global population, the Global South has only 20% of fossil fuel production and reserves, and oil and gas production are in decline. ➡️ 𝗕𝘂𝘁 𝗶𝘁 𝗶𝘀 𝗿𝗶𝗰𝗵 𝗶𝗻 𝗿𝗲𝗻𝗲𝘄𝗮𝗯𝗹𝗲𝘀. The Global South has 70% of global renewable potential, and 50% of cleantech minerals. Their renewable resource is nearly 400 times larger than their current fossil fuel production. ➡️ 𝗧𝗵𝗿𝗲𝗲 𝗾𝘂𝗮𝗿𝘁𝗲𝗿𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗚𝗹𝗼𝗯𝗮𝗹 𝗦𝗼𝘂𝘁𝗯 𝗶𝘀 𝗶𝗻 𝘁𝗵𝗲 𝘀𝘄𝗲𝗲𝘁 𝘀𝗽𝗼𝘁 73% of the Global South (by energy demand) falls under four criteria that encourage cleantech adoption: middle income or above; low energy demand per capita; fossil fuel importing or self-sufficient; and vast renewable potential. ➡️ 𝗧𝗵𝗲 𝗿𝗲𝘃𝗼𝗹𝘂𝘁𝗶𝗼𝗻 𝗵𝗮𝘀 𝗯𝗲𝗴𝘂𝗻. In 2024, 87% of Global South capex on electricity generation will flow into clean energy, and the IEA expects new solar and wind capacity to increase by 60% to 77 GW. . ➡️ 𝗖𝗮𝗽𝗲𝘅 𝗽𝗮𝗿𝗶𝘁𝘆 𝗼𝗽𝗲𝗻𝘀 𝘁𝗵𝗲 𝗱𝗼𝗼𝗿. The halving of solar and battery costs in 2023 means that the up-front cost of solar has fallen to the same level as fossil generation, and the purchase cost of electric vehicles is falling to below that of petrol vehicles. This encourages cleantech solutions over fossil in spite of the higher cost of capital. ➡️ 𝗖𝗵𝗶𝗻𝗲𝘀𝗲 𝘀𝘂𝗽𝗽𝗹𝘆 𝗺𝗮𝗸𝗲𝘀 𝗰𝗵𝗮𝗻𝗴𝗲 𝗲𝗮𝘀𝗶𝗲𝗿. China has already announced enough cleantech capacity to supply all of the demand of the Global South, and since 2023 has invested over $100 billion into cleantech around the world. ➡️ 𝗣𝗲𝗮𝗸 𝗳𝗼𝘀𝘀𝗶𝗹 𝗳𝘂𝗲𝗹 𝗱𝗲𝗺𝗮𝗻𝗱. Fossil fuel demand for electricity will peak by 2030 in the Global South, and the remaining areas of demand growth are limited as the result of ongoing electrification and efficiency. ➡️ 𝗪𝗲 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗱𝗼 𝗺𝗼𝗿𝗲. Two key areas of the Global South are not yet adopting cleantech – low income countries (6% of energy demand) and fossil fuel exporters (21% of demand). But even here we see signs of change, for example in Ethiopia and Colombia. ➡️ 𝗛𝗼𝘄 𝘁𝗼 𝘀𝗽𝗲𝗲𝗱 𝘂𝗽 𝗰𝗵𝗮𝗻𝗴𝗲. Many solutions exist to speed up change including domestic policy to encourage the adoption of cleantech and attract investment, MDB reform, catalytic and concessional finance directed especially to poor and vulnerable countries, and technology transfer. As COP29 approaches, now is the time for NDCs to reflect the new economic reality of cleantech. BBVA

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#Brazil: The consensus view on Brazil has shifted from optimism over the prospect of substantial policy rate cuts from a starting point of a very high positive real interest rate (still positive 6.5% ex-post) and a cheap currency (a reversion to the 10-year median real effective exchange rate would imply c15% upside to the spot FX rate) to concern over sticky inflation (last monthly report of 4.8% yoy), fiscal indiscipline (the IMF forecasts a deterioration in fiscal deficit from 6.9% of GDP in 2024 to 7.3% in 2025), persistent very high local currency government gross debt (the IMF forecasts 92% of GDP in 2025), and crowding out of the private sector. This week's fiscal plan, announced by the latest technocratic finance minister to be trumped by his populist president, reinforces that consensus view. This is not a socialist versus capitalist point: arguably what we're seeing with Lula-Haddad happened with Bolsonaro-Guedes. But what does all this mean for the investment case in Brazil equities and currency which are already just about the worst performers among the large #emergingmarkets so far in 2024? Along with colleague Geronimo Mansutti, CFA, I explore that in the full report on Tellimer, linked in the comment below.

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A very foundational critique of sustainability scientists (Mark Diesendorf, @Geoff Davies, Tommy Wiedmann, Joachim H Spangenberg, and Steven Hail) on neoclassical economics (NCE) (👉 https://lnkd.in/e_km2vzD) Before anyone claims, "this is a caricature of modern economics": it's not entirely. While there have been significant advances, more nuanced insights, and extensive research, Neoclassical Economics (NCE) still dominates what is taught in universities, shapes much of policymaking, and forms the basis of many macroeconomic models. The core assumptions of NCE continue to influence key decisions, even as the real world becomes increasingly complex and urgent in its demands. The ten fundamental hypotheses (labeled H1–H10) and four other claims (labeled C1–C4) of NCE are set out in the table 👇 , together with concise refutations. The articles argues that assumptions and models contribute to both environmental destruction and social inequality. Main insights from their review: 🟫𝐈𝐧𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭 𝐰𝐢𝐭𝐡 𝐒𝐜𝐢𝐞𝐧𝐭𝐢𝐟𝐢𝐜 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝𝐬: The authors find that many hypotheses fail to meet basic scientific requirements such as empirical confirmation and consistency with Earth system science. 🟫𝐄𝐧𝐯𝐢𝐫𝐨𝐧𝐦𝐞𝐧𝐭𝐚𝐥 𝐃𝐚𝐦𝐚𝐠𝐞: NCE treats nature as an external factor, assuming infinite resources and waste absorption capacities. This contradicts current environmental science, which shows we have exceeded six out of nine planetary boundaries 🌱. 🟫𝐒𝐨𝐜𝐢𝐚𝐥 𝐈𝐧𝐞𝐪𝐮𝐚𝐥𝐢𝐭𝐲: The authors argue that NCE promotes policies leading to greater inequality, with claims like the "trickle-down effect" having no evidence. Instead, it concentrates wealth in the hands of the few, exacerbating social divides ⚖️. 🔑 Major Flaws of NCE: 🟥 𝐌𝐞𝐭𝐡𝐨𝐝𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐢𝐬𝐦: NCE assumes that individual decisions are independent of societal influences, ignoring the complexities of social interactions. 🟥𝐈𝐫𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐟𝐨𝐜𝐮𝐬 𝐨𝐧 𝐠𝐫𝐨𝐰𝐭𝐡: It prioritises economic growth as measured by GDP, even when this growth is unsustainable and doesn't benefit all segments of society. 🟥𝐅𝐚𝐢𝐥𝐮𝐫𝐞 𝐭𝐨 𝐩𝐫𝐞𝐝𝐢𝐜𝐭 𝐜𝐫𝐢𝐬𝐞𝐬: NCE has been unable to foresee or address major economic disruptions like the Global Financial Crisis of 2008, showing its lack of real-world relevance. It's time not only to rethink economics for a future that values both people and the planet 🌍, but also to put these ideas into action by implementing economic policies that align with this new vision. We need a shift towards frameworks that prioritise ecological sustainability and social well-being over outdated models of growth and profit.

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According to Citi Bank, #gold is projected to reach $3000 within the next year: https://bloom.bg/4bzneFY Empress has direct leverage to rising precious metals prices. Learn more in our presentation: https://lnkd.in/gSsrwzpM TSX-V: EMPR | OTCQX: EMPYF⁣ #Mining #Metals #PreciousMetals #Royalty #Streams #Gold #Au #Investing

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From S&P Global Commodity Insights: Abu Dhabi National Oil Co.'s exports of Upper Zakum #crude have trended downward over the last eight months, complicating plans for a much-discussed futures contract underpinned by the grade. In the last few months, Upper Zakum exports have hovered around 700,000 b/d, dropping to as low as 589,000 b/d in June, according to S&P Global Commodities at Sea data. See more- https://okt.to/8ztEwY

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