- China’s Exports Remain Tepid as Trump Trade Challenge Looms
China’s exports remained subdued as soft global demand weighed on sales, raising uncertainties for the nation’s external sector as it braces for potential trade frictions with the U.S. under a Donald Trump presidency.
Overseas shipments dropped 6.1 percent from a year earlier in December, the customs administration said Friday. Imports rose 3.1 percent, leaving a $40.8 billion trade surplus.
“External demand remains sluggish,” said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. “The outlook for exports this year doesn’t look very promising,” he said, citing slowing global trade amid rising protectionism and uncertainties in U.S. trade policy.
The weakening yuan, which fell 6.5 percent against the dollar last year and depreciated 6 percent against a basket of currencies, is cushioning the impact of tepid global demand but doing little to revive sales. The world’s largest exporter faces more challenges and uncertainties this year as Trump — who accused China of being a trade cheat through his campaign — is due to take office in a week.
The trade surplus, which represents demand borrowed from the rest of the world, decreased for the first time since 2011. It fell to $512.9 billion from a record $593.9 billion in 2015.
China will closely monitor U.S. trade policy after Trump’s inauguration, Customs spokesman Huang Songping said at a briefing in Beijing, citing global trends toward populist policies.
“The political landscape is changing significantly,” Huang said. “Brexit, elections in major European countries, the new president in the U.S. and the election in South Korea will all bring uncertainties to the current policies, and may add to the global protectionism trend.”
Trade still faces large uncertainties this year amid a complicated global context and downward pressure on the economy is “still big,” Huang said. Higher costs reduce trade advantages and market share is being lost to Southeast Asian nations, he said.
Exports in yuan terms rose 0.6 percent in December while imports posted a second-straight 10.8 percent gain. For the full year, exports fell 2 percent in yuan terms while imports rose 0.6 percent, the customs administration said.
Exports to the U.S., China’s largest trading partner, rose 5.1 percent for a second straight increase while shipments to the European Union resumed declines, falling 4.7 percent. Exports to South Korea climbed 8.3 percent for the first increase since March.
Iron ore imports by China surged to a record above 1 billion metric tons last year as unexpectedly strong steel production and lower local mine output combined to fire up demand in the world’s top buyer for cargoes from Australia and Brazil, supporting a rebound in prices.
Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns
Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.
Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.
The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.
This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.
While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.
Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.
Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.
Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.
Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.
Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.
Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.
The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.
However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.
Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.
He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.
Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.
The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.
NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade
The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.
Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.
Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.
In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.
Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.
He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.
Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.
In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.
Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.
The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.
As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.
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