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Yahoo
8 hours ago
- Business
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Oil prices fall as market eyes US-Russia talks on Ukraine
By Colleen Howe BEIJING (Reuters) -Oil prices fell in early Asian trading on Monday, extending declines of more than 4% last week on higher U.S. tariffs on its trading partners, an OPEC output hike, and expectations the U.S. and Russia were moving closer to a Ukraine ceasefire pact. Brent crude futures fell 52 cents, or 0.78%, to $66.07 a barrel by 0041 GMT, while U.S. West Texas Intermediate crude futures fell 58 cents to $63.30. Expectations have risen for a potential end to sanctions that have limited the supply of Russian oil to international markets, after U.S. President Donald Trump said on Friday that he would meet with Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine. The news came as the U.S. has stepped up pressure on Russia, raising the prospect that penalties on Moscow could also be tightened if a peace deal isn't reached. Trump set a deadline of last Friday for Russia to agree to peace in Ukraine or have its oil buyers face secondary sanctions, and at the same time is pressing India to reduce purchases of Russian oil. On top of U.S.-Russia talks, U.S. inflation data on Tuesday will be another key price driver this week, IG market analyst Tony Sycamore said in a note. "A weaker-than-expected CPI print would boost expectations for earlier and deeper Fed interest rate cuts, which would likely stimulate economic activity and increase crude oil demand." "Conversely a hotter print would spark stagflation fears and push back expectations of Fed rate cuts." Trump's higher tariffs on imports from dozens of countries, which took effect on Thursday, are expected to weigh on economic activity as they force rerouting of supply chains and higher inflation. Dragged down by the gloomy economic outlook, Brent fell 4.4% over the week ended Friday, while WTI dropped 5.1%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-08-2025
- Business
- Yahoo
China's solar giants quietly shed a third of their workforces last year
By Colleen Howe BEIJING, August 1 (Reuters) -China's biggest solar firms shed nearly one-third of their workforces last year, company filings show, as one of the industries hand-picked by Beijing to drive economic growth grapples with falling prices and steep losses. The job cuts illustrate the pain from the vicious price wars being fought across Chinese industries, including solar and electric vehicles, as they grapple with overcapacity and tepid demand. The world produces twice as many solar panels each year as it uses, with most of them manufactured in China. Longi Green Energy, Trina Solar, Jinko Solar, JA Solar, and Tongwei, collectively shed some 87,000 staff, or 31% of their workforces on average last year, according to a Reuters review of employment figures in public filings. Analysts say the previously unreported job losses were likely a mix of layoffs and attrition due to cuts to pay and hours as companies sought to stem losses. Layoffs are politically sensitive in China, where Beijing views employment as key to social stability. Other than a 5% cut acknowledged by Longi last year, none of the firms mentioned above have announced any job cuts or responded to questions from Reuters. "The industry has been facing a downturn since the end of 2023," said Cheng Wang, an analyst at Morningstar. "In 2024, it actually got worse. In 2025, it looks like it's getting even worse." Since 2024, more than 40 solar firms have delisted, gone bankrupt or been acquired, according to a presentation by the photovoltaic industry association in July. China's solar manufacturers built new factories at a fever pitch between 2020 and 2023 as the state redirected resources from the sinking property sector to what it used to call the "new three" growth industries: solar panels, electric cars and batteries. That building spree led to falling prices and a brutal price war made worse by U.S. tariffs thrown up against exports from the many Chinese-owned factories in Southeast Asia. The industry lost $60 billion last year. MORE TO COME While analysts say it is unclear whether job cuts continued this year, Beijing is increasingly signalling it intends to intervene to cut capacity, sending polysilicon prices soaring nearly 70% in July while solar panel prices have increased more modestly. Major polysilicon producer GCL told Reuters on Thursday that top producers plan to set up an OPEC-like entity to control prices and supply. The group is also setting up a 50-billion yuan vehicle to buy and shut around a third of the industry's lower-quality production capacity. President Xi Jinping in early July called for an end to "disorderly price competition," and three days later the industry ministry pledged to calm price wars and retire outdated production capacity during a meeting with solar industry executives. While Beijing has not said when or how it will act, a source with direct knowledge of the matter said it was determined to focus on the issue before the end of the current five-year plan this year. Officials in eastern China's Anhui province, a manufacturing hub, told solar company executives in June to stop adding new manufacturing and shut production lines operating at under 30% capacity, according to two industry sources who declined to be identified due to the sensitivity of the matter. A board member at a solar firm in the province said new capacity had already required verbal approval from powerful state planner the National Development and Reform Commission (NDRC) this year. They asked for their company's name to be withheld because the discussions were private. NO EASY FIX But many provincial governments are likely to be reluctant to crack down hard on overcapacity, analysts say. These officials are scored on jobs and economic growth and are loathe to see local champions sacrificed to meet someone else's target. Trina Solar's chairman told an industry conference in June that new projects had begun this year despite the NDRC calling for a halt in February. The foot-dragging reflects the scale of the cull required. Jefferies analyst Alan Lau estimated at least 20-30% of manufacturing capacity would have to be eliminated for companies to return to profitability. "There's a lot of overcapacity in China, like steel, like cement, but you don't see any industry in the past having industry-wide cash loss for one and a half years already," Lau said. Company-level losses are on the same scale as in real estate, another crisis-hit sector, even though solar is only about one-tenth the size, he said. "This is highly unusual and highly abnormal." Sign in to access your portfolio
Yahoo
31-07-2025
- Business
- Yahoo
Exclusive-China polysilicon firms plan $7 billion fund to shut a third of industry capacity
By Colleen Howe BEIJING (Reuters) -Chinese producers of polysilicon, a building block for solar panels, are in talks to create a 50 billion yuan ($7 billion) fund to acquire and shut down roughly a third of production capacity and restructure part of the loss-making sector, GCL Technology Holdings said. The top polysilicon producer told Reuters on Thursday plans were being discussed to acquire and shut at least 1 million metric tons of lower-quality polysilicon capacity. "It is sort of like the OPEC of the polysilicon industry, wherein total supply for a specified timeframe has to be agreed by the central committee and production quotas to be allocated to producers," GCL's investor relations director Jun Zhu said. The plan is one of the strongest signals yet that the heightened rhetoric against overcapacity rolled out by the Chinese government this month is translating into action. Chinese industries, from solar to electric vehicles, are grappling with massive overcapacity and vicious price wars that are wiping out profits. Beijing restructured industries including polysilicon, steel and cement in previous waves of reforms more than a decade ago. However, this latest round is expected to be more difficult given many of the problem sectors are now filled with private firms and there are fewer growth sectors to pick up the slack. The polysilicon acquisition vehicle would be launched late in the third quarter of this year and would start making purchases in the fourth quarter, both of excess capacity and of market inventories, Zhu said. The proposed closures would leave approximately 2 million tons of capacity remaining in the market, he added. China's production capacity was 3.25 million tons at the end of 2024, according to Bernreuter, an industry research group. GCL Chairman Zhu Gongshan said at an industry conference in June that major firms were working to restructure the industry, while local media Caixin reported producers were in talks to create an acquisition fund. Reuters is reporting the size, scope and timing of the plan for the first time. China's state planner, the National Development and Reform Commission, did not immediately respond to a request for comment. China has a near-monopoly over solar-grade polysilicon, producing 95% of the world's total in 2024, according to Bernreuter. China's share of the rest of the solar supply chain, including cells, modules and wafers has also reached over 80% in recent years. Polysilicon prices are up nearly 70% this month, alongside a range of other industrial commodities as Beijing's rhetoric, plus smaller initiatives from various ministries and provincial governments led markets to bet supply side reform was on the way. FINANCING AND PUSHBACK It is unclear where the money to finance the vehicle would come from given major players GCL and Tongwei are losing money. "No one knows how the capacity acquisition will be implemented, because there's no past experience to refer to," said UBS analyst Yishu Yan, adding that most of the companies in the sector are indebted. Also unclear is how active a role the provincial and central governments will play in the vehicle and the factory closures it plans to make. Jun Zhu said the vehicle's central committee would be made up of producers, lenders and potentially regulators, without specifying who they would be. Yan at UBS said any plan to shut capacity may face opposition from local governments, where officials are scored on jobs and economic growth. Many of these governments also have stakes in local private solar firms. "If the solar companies are facing bankruptcy or to be acquired, there could be some pushback by the local governments," she said. ($1=7.15 yuan)
Yahoo
31-07-2025
- Business
- Yahoo
Exclusive-China polysilicon firms plan $7 billion fund to shut a third of industry capacity
By Colleen Howe BEIJING (Reuters) -Chinese producers of polysilicon, a building block for solar panels, are in talks to create a 50 billion yuan ($7 billion) fund to acquire and shut down roughly a third of production capacity and restructure part of the loss-making sector, GCL Technology Holdings said. The top polysilicon producer told Reuters on Thursday plans were being discussed to acquire and shut at least 1 million metric tons of lower-quality polysilicon capacity. "It is sort of like the OPEC of the polysilicon industry, wherein total supply for a specified timeframe has to be agreed by the central committee and production quotas to be allocated to producers," GCL's investor relations director Jun Zhu said. The plan is one of the strongest signals yet that the heightened rhetoric against overcapacity rolled out by the Chinese government this month is translating into action. Chinese industries, from solar to electric vehicles, are grappling with massive overcapacity and vicious price wars that are wiping out profits. Beijing restructured industries including polysilicon, steel and cement in previous waves of reforms more than a decade ago. However, this latest round is expected to be more difficult given many of the problem sectors are now filled with private firms and there are fewer growth sectors to pick up the slack. The polysilicon acquisition vehicle would be launched late in the third quarter of this year and would start making purchases in the fourth quarter, both of excess capacity and of market inventories, Zhu said. The proposed closures would leave approximately 2 million tons of capacity remaining in the market, he added. China's production capacity was 3.25 million tons at the end of 2024, according to Bernreuter, an industry research group. GCL Chairman Zhu Gongshan said at an industry conference in June that major firms were working to restructure the industry, while local media Caixin reported producers were in talks to create an acquisition fund. Reuters is reporting the size, scope and timing of the plan for the first time. China's state planner, the National Development and Reform Commission, did not immediately respond to a request for comment. China has a near-monopoly over solar-grade polysilicon, producing 95% of the world's total in 2024, according to Bernreuter. China's share of the rest of the solar supply chain, including cells, modules and wafers has also reached over 80% in recent years. Polysilicon prices are up nearly 70% this month, alongside a range of other industrial commodities as Beijing's rhetoric, plus smaller initiatives from various ministries and provincial governments led markets to bet supply side reform was on the way. FINANCING AND PUSHBACK It is unclear where the money to finance the vehicle would come from given major players GCL and Tongwei are losing money. "No one knows how the capacity acquisition will be implemented, because there's no past experience to refer to," said UBS analyst Yishu Yan, adding that most of the companies in the sector are indebted. Also unclear is how active a role the provincial and central governments will play in the vehicle and the factory closures it plans to make. Jun Zhu said the vehicle's central committee would be made up of producers, lenders and potentially regulators, without specifying who they would be. Yan at UBS said any plan to shut capacity may face opposition from local governments, where officials are scored on jobs and economic growth. Many of these governments also have stakes in local private solar firms. "If the solar companies are facing bankruptcy or to be acquired, there could be some pushback by the local governments," she said. ($1=7.15 yuan)
Yahoo
30-07-2025
- Business
- Yahoo
Oil steady after big gains on Trump's Russia ultimatum
By Colleen Howe BEIJING (Reuters) -Oil prices ticked up in early trading on Wednesday after rising more than 3% in the previous session as potential supply shortages came into focus after U.S. President Donald Trump gave Moscow an abbreviated deadline toward ending the war in Ukraine. Brent crude futures rose 14 cents, or 0.19%, to $72.65 a barrel by 0048 GMT while U.S. West Texas Intermediate crude climbed 2 cents, or 0.03%, to $69.23 a barrel. Both contracts had settled at their highest since June 20 on Tuesday. On Tuesday, Trump said he would start imposing measures on Russia, including 100% secondary tariffs on its trading partners, if it did not make progress on ending the war within 10-12 days, moving up an earlier 50-day deadline. "Effective secondary 100% tariffs would lead to a dramatic shift in the oil market. A number of key buyers of Russian oil would likely be reluctant to continue purchases, particularly large U.S. trading partners," ING analysts said in a note. "While this gives OPEC+ room to start unwinding additional tranches of supply cuts, it would still leave the market in deficit under a worst-case scenario." The U.S. had warned China, the largest buyer of Russian oil, that it could face huge tariffs if it continues buying, Treasury Secretary Scott Bessent told a news conference in Stockholm where the U.S. was holding trade talks with the EU. JP Morgan analysts said in a note that while China was not likely to comply with U.S. sanctions, India has signaled it would do so, potentially putting 2.3 million barrels per day of Russian oil exports at risk. The U.S. and EU averted a trade war with a deal that included 15% U.S. tariffs on European imports, easing concerns about the impact of trade tensions on economic growth and offering further support to oil prices. In Venezuela, foreign partners of state oil company PDVSA are still waiting for authorisations from the U.S. to operate in the sanctioned country after talks on the subject last week, which could return some supply to the market, potentially easing pressure for prices to rise. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
