The probe into EU wine has been opened at the request of Chinese wine manufacturers, according to China’s Commerce Ministry statement. “The Commerce Ministry has received an application from the domestic wine industry, which accuses wine imported from Europe of entering China’s market by use of unfair trade tactics such as dumping and subsidies,” Reuter’s quotes the government’s statement. “We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law,” the statement says. It all comes as Chinese manufacturers are allegedly selling solar panels in the EU below cost in a practice known as dumping, which is said to be hurting European producers. “It has the potential to destroy an important industry in Europe if we don’t act today,” EU Trade Commissioner Karel De Gucht said. The Commission calculated the price of the Chinese panels sold in Europe should be 88% higher, the news agency reports. The EU will impose duties on Chinese solar panels imports from Thursday. However, it will reduce the originally planned rates in the hope of reaching a negotiated settlement with Beijing, Reuter’s reports. They will initially average 11.8% – and will be phased in gradually reaching 47.6% after two months, if no compromise with China is found. Yingli Green Energy Holding Co., Wuxi Suntech Power Co. and Changzhou Trina Solar Energy Co. are among the more than 100 companies targeted. The European Union is China’s most important trading partner, while for the EU, China is second only to the US. Chinese exports of goods to the 27-member bloc totaled 290 billion euros ($376 billion) last year, with 144 billion euros going the other way. The EU now has 31 ongoing trade investigations, 18 of them involving China. … Read More
Warning over ‘long-term’ Swedish export slump
Sweden’s largest business confederation has gone out guns blazing, criticizing politicians for not facing up to the challenges of “a lost year for Swedish exports” in 2012. … Read More
Gap, Walmart holdout in Bangladesh safety agreement following factory disaster
A growing number of major European retailers have so far announced this week that they will participate in a plan to upgrade fire and safety in Bangladesh — including Spanish retailer Inditex, parent company of Zara, British retail giants Primark and Tesco, as well as H&M. The latter being the largest purchaser of garments made in Bangladesh. The agreement, known as the Accord on Fire and Building Safety in Bangladesh, comes on the heels of a catastrophic incident at the Rana Plaza building, the worst in the history of the global garment industry, which collapsed on April 24, trapping over a thousand workers in the rubble. Labor groups have continued to exert pressure on major American companies, including Walmart and Gap, to take part in the new safety agreement. According to the New York Times, however, both companies have so far refused to sign the new agreement. Gap, which is reported to offer the strongest opposition to the new plan, is said to be concerned that the agreement would entangle the company in legal cases filed by American lawyers on behalf of workers in Bangladesh and seeks reduced legal liability. Walmart, which has been independently conducting factory inspections in Bangladesh since a fire killed 110 in November, has rejected the agreement’s inclusion of “dispute resolution mechanisms”. Europe as a whole accounts for 60 per cent of the country’s clothing exports, according to the Times. Italian fashion label Benetton, British retailer Marks & Spencer and Spanish retailer Mango became the latest European companies to agree to sign a contract that will mandate independent safety inspections of factories, as well as cover the costs of repairs. According to the Associated Press, the new pact also calls for retailers to pay up to $500,000 a year toward the effort, and to halt business with any Bangladesh factory that refuses to make safety improvements.The new agreement would be legally binding, as opposed to Walmart’s independent safety plan announced on Tuesday, which is voluntary and was criticized by labor groups such as the AFL-CIO.”It’s not surprising, and the timing is fishy,” Brian Finnegan, global worker rights coordinator at the AFL-CIO, remarked to the Huffington Post.”The whole point of what we’re doing is to make it binding and enforceable,” he added.Prior to the large factory collapse companies including PHV, which oversees well-known American labels such as Calvin Klein, Tommy Hilfiger and Izod, had already agreed to sign the new safety pact.Bangladesh hosts some 5,000 garment factories and employs 3.6 million garment workers. According to AP that makes the country the third-biggest exporter of clothes in the world after China and Italy.In addition to hazardous working conditions, pay for workers in Bangladesh is severely depressed as a result of government anti-union efforts and the scarcity of employment. Compensation for workers in the country is one of the lowest worldwide, with an average pay of $38 per month.Scott Nova, executive director of the Worker Rights Consortium and one of the sponsors of the safety agreement, praised its potential.“This agreement is exactly what is needed to finally bring an end to the epidemic of fire and building disasters that have taken so many lives in the garment industry in Bangladesh,” said Nova.Documents provided to the Times indicate that Walmart had sourced clothing from the collapsed factory through a Canadian contractor. The American retailer, the second-largest producer of clothing in Bangladesh, is considered one of the main barriers to cementing the safety agreement. … Read More
Market Buzz: Chinese macro data to drive floors
The Asian economic powerhouse is expected to release data on retail sales, industrial manufacturing and April’s urban investment figures. “Forecast readings are shadowing forth a slight growth for all of the free indicators,” Investcafe analyst Darya Pichugina said, adding that some analysts are not quite so optimistic.“There’s no visible improvement in the macro situation,” analyst Liu Guangming of Beijing’s Dongxing Securities Co. said, according to Bloomberg.China’s overall economic performance has been largely disappointing: Despite recent trade figures showing an improved economic climate, fears persist of a downturn in the world’s second-largest economy.In April, Chinese exports rose 14.7 percent year-on-year and imports increased 16.8 percent, both outperforming analyst expectations, the People’s Republic Customs Administration reported last Wednesday. However, Citigroup economist Ding Shuang warned that the improved figures may be reflecting “over-invoicing [by exporters].”China also faces a brutal GDP forecast in 2013. In March, China’s projected GDP growth was cut from 7.9 percent to 7.7 percent, due to weak global export demand. April manufacturing data was also disappointing, with an HSBC report on the service sector showing its weakest expansion since August 2011.Across Asia, Japanese shares are trading higher on Monday, with the Nikkei 225 gaining 1.24 percent; floors in Hong Kong and Shanghai are currently closed.Russian stocks closed Friday’s session in the red, with the RTS falling 1.54 percent to 1,429.78 and the MICEX declining 0.47 percent to 1,426.25. A sharp cut in economic forecast for Russia issued by the European Bank for Reconstruction and Development (EBRD) on Friday could be one of the main reasons the selloff on Russian floors, Investcafe analyst Anna Bodrova explained. The EBRD revised its forecast for the Russian economy, predicting GDP growth of 1.8 percent in 2013 – a sharp downgrade from the previous forecast of 3.5 percent.European markets finished higher on Friday, with French stocks leading the region. The CAC 40 was up 0.64 percent, London’s FTSE 100 added 0.49 percent and Germany’s DAX gained 0.19 percent to close at a record high of 8,278.59 points.North and South American markets have traded mixed recently: The S&P 500 and the Dow Jones remained above key psychological levels last week – 15,000 and 1,600, respectively. The Nasdaq rose 1.7 percent for the week, and the Latin American Bovespa lost 0.61 percent. … Read More
Gazprom eyes Japanese expansion
Japan is largely dependent on gas exports, as the country consumes above 100 billion cubic metres of gas a year while producing domestically no more than 4 billion.Since the Fukushima disaster in 2011 Japan is seeing a greater need for gasAfter the incident, “of 50 nuclear power units, only two are working – that’s a large drop in power generation, we understand that perfectly,” said Russia’s President Vladimir Putin at a press conference following talks with Japanese Prime Minister Shinzo Abe.Given Russia’s abundant hydrocarbon reserves, the country is quite “capable of providing for the growing consumption of hydrocarbons in Japan without harm to our traditional partners and without harm to our own consumers,” Putin added.Russia supplies about 6.5 million tonnes of gas to Japan each year, which is about 8% of the total need of the Japanese.Russia must need closer energy cooperation with Japan to back its Eastern Gas Program, which exports to Asian – Pacific countries, says Michael Korchyomkin, a director at East European Gas Analysis.Among the joint gas projects between Russia and Japan are Vladivostok LNG and Sakhalin–2, an oil and gas joint venture between Gazprom, Shell and Japanese companies Mitsui and Mitsubishi.Gazprom’s chances to successfully compete in regasification in Japan look slim, as currently the country processes about 250 bn of cubic metres of liquifed gas. So, new LNG terminals are unlikely to have huge effect on the country’s economy, analysts say.Further cooperation between Gazprom and Japan should deal mainly with the latest projects aimed at increasing Russian gas exports to Japan, says Grigory Birg, an analyst from Investcafe.The Sakhalin – 2 project should be more attractive for the Japanese, as the prime costs there are acceptable, Korchyomkin added. The situation around the Vladivostok LNG plan, that’s due to start operations in 2018, so far looks vague. The price of gas produced there could rise too much – to as $700 per a thousand cubic metres, the expert concluded.Pricing it inAt the moment price issue remains a key one for the Japanese. “Cutting prices for the fuel bought abroad is an urgent task for our country,” said Toshimitsu Motegi, the Japanese Minister of Economy, Trade and Industry.People in Japan pay about $550 per thousand cubic metres of gas, which compares to the average of $365 in Europe.The Japanese have started to ask for lower prices, Valery Nesterov, an analyst at Sberbank Investment Research, told Kommersant daily. This isn’t surprising, as the number of similar requests has increased, adds Mariya Belova, a senior analyst at the energy sector at Moscow School of Management, Skolkovo. Rosneft and Novatek are among other Russian companies offering their LNG (liquefied natural gas) projects, and looking for possible delivery contracts to the country. … Read More
Rosneft sets sights on Iraq and Venezuela
Igor Sechin told reporters on Tuesday that the company is considering teaming up with veteran business partner ExxonMobil in Iraq.”We will work with anyone who offers good terms, we’ll work with ExxonMobil too,” Reuters reported Sechin as saying.An Iraqi oil ministry delegation will arrive in Moscow on May 10 to further discuss the deal.Since Sechin became CEO, Russia’s largest producer of oil Rosneft, has upped its game against state-controlled rival Gazprom which currently controls 70% of Russian gas exports.His first big step was acquiring the Anglo-Russian company TNK-BP from BP for $55 billion on March 21 2013, which will give it an Arctic niche.Sechin aims to chip away at the Gazprom monopoly, and to double Rosneft’s domestic gas market by 2020, from 9% to 19-22%, plans made clear at an investor meeting in London on Tuesday.“We like to work with gas very much,” Sechin said at the meeting. “The domestic market is also attractive, and it suits us well.”Sechin predicts the new mega company may reach a market capitalization of $120 billion in the next two years, which would trump Gazprom’s estimated value of $73-90 billion.According to the Oxford Institute for Energy Studies, by 2013 Russia will even outperform its pre-crisis levels of 2008.Rosneft expects to produce more than 40 billion cubic meters (bcm) of gas in 2013, over 60 by 2016 and 100 bcm in 2020, half of which will be produced in new projects.The company is also on Gazprom’s heels in LNG development, as both companies are looking to expand their influence, particularly in exports to Asia.Venezuelan vision Just hours after the Iraq announcement, Venezuela’s government trumpeted a joint venture with Rosneft and PDVSA, the national oil company that dominates the Venezuelan market.Rosneft will get a 40% share and the preliminary license is set for 25 years, and subject to extension.The Venezuelan project will develop 342 kilometers in the Orinoco River basin, one of the richest oil reserves in the world, with an estimated 86.4 billion barrels, according to RIA Novosti.Russian companies are involved in 5 oil projects in Venezuela, the world’s fifth largest oil exporter.Venezuelan Oil Minister Rafael Ramirez has estimated the joint Russian-Venezuelan projects will be worth close to $50 billion by 2019. … Read More
Rosneft wants Gazprom split to improve its LNG competitiveness
The plan could allow Rosneft to put extra competitive pressure on Gazprom, and improve its position in the Russian LNG industry.According to Kommersant daily citing unnamed sources, this question is being discussed at the “highest level”.If Gazprom is divided, the configuration of Russia’s gas industry will become similar to the oil industry, where state-owned Transneft operates cross-country pipelines, and state-run Rosneft is engaged in crude production. While the Russian oil industry has lots of private companies operating in the market, the LNG industry has been dominated by the Gazprom monopoly for the past decade. Gazprom has been under increasing pressure from its domestic rival in recent years.The desire of Rosneft management to split Gazprom is understandable. Rosneft’s gas assets have increased significantly, especially following the purchase of TNK-BP, and a controlling stake in Itera. Competition with Rosneft will expose Gazprom to market prices, as it will be unable to keep control of mining contracts and pricing. The Kremlin could agree to the restructuring of Gazprom as its monopoly weakens.Rosneft has already declared its intention to boost gas production to 100 million cubic meters per year. Gazprom produced 478 cubic meters in 2012. Recent reports said the Rosneft claims natural gas deposits also targeted by Gazprom, while previously Gazprom and Rosneft interest did not cross, as the latter got licenses for oil fields, while Gazprom focused on gas production. Last week Rosneft and Exxon Mobil unveiled details of a $15-billion liquefied natural gas project aimed at supplying Asia-Pacific markets challenging Gazprom’s monopoly on Russian gas exports. … Read More
