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Singapore Power Prices Spike 1,290% As Energy Crisis Emerges

Singapore Power Prices Spike 1,290% As Energy Crisis Emerges

The global energy crisis continues to worsen with its latest victim Singapore. Power prices in the Southeast Asian country saw a dramatic surge in wholesale power prices.

According to Bloomberg, provisional Uniform Singapore Energy Price jumped S$4,499 ($3,293) per megawatt-hour, the highest on record or about a 1,290% jump in the last few days. Just on Tuesday, prices were S$323.61 ($236.60).

With the Northern Hemisphere winter just weeks away, Singapore’s electricity prices are likely to remain elevated as natgas demand continues to strengthen across Europe and the rest of Asia, due in part to La Nina conditions producing unseasonably colder trends.

There’s word that limited gas supply from Indonesia has already resulted in turbine trips, or emergency shutdown of power generation turbines, at some Singapore power plants.

Julius Wiratno, deputy for operations at Indonesia oil and gas regulator SKK Migas, told Bloomberg that gas flows from Indonesia to Singapore are at “minimum demand levels” as supply is limited.

“Almost all of the independent retailers were forced out of the market, leaving a significant number of consumers previously on fixed price tariffs at the mercy of the spot market,” Whistler said.

Singapore has resorted to bringing back combined-cycle gas turbine capacity in the event of more turbine trips to mitigate a collapse of its power grid.

A spike in power prices might not have a tremendous impact on households, considering a majority of them are under fixed-rate contracts. Still, it could unleash pain for companies that tend to be on variable contracts.

Considering Singapore’s power grid is mostly powered by natgas, we suspect this is not the last we’ll hear about soaring power prices as winter fast approaches. We first noted the energy crisis was going global back in September.

Singapore Oil Trading Giant On Verge Of Collapse After Banks Freeze Credit Lines

Singapore Oil Trading Giant On Verge Of Collapse After Banks Freeze Credit Lines

Back in the second half of 2015, shortly after Saudi Arabia unleashed the (first) OPEC disintegration by flooding the market with oil in hopes of killing US shale (so deja vu… only back then it took it about two years for it to realize its low production costs are no match for the US junk bond market) and when China’s economy briefly collapsed forcing Beijing to devalue its currency and trigger a violent plunge in commodity prices around the globe (so deja vu… only back then the Shanghai Accord of Jan 2016 restored order to the world), traders were looking for ways to short the chaos and one of the favorite trades was to bet on the collapse of commodity merchants such as Glencore, Vitol, Trafigura and Mercuria, whose fates were closely interwoven with the prices of the commodities they traded. As a result, Glencore’s stock price plunged and its CDS soared amid fears the commodity crash cascade would lead to a default wave among anyone with commodity exposure.

Fast forward 5 years when the biggest commodity crash in generations, one which has sent the price of oil tumbling to levels not seen since George H.W. Bush was invading Middle Eastern nations, and… nothing: while the Glencores of the world have indeed dropped, their valuations are nowhere near the late 2015 lows even as the prices of several key commodities have rarely been lower.

That might be changing, however, because the longer global economic activity fails to rebound and the longer commodity prices remain at their current depressed levels, the more the global liquidity crisis will transform into a solvency crisis, hitting some of the most prominent commodity traders in the world… such as Singapore’s iconic oil trader Hin Leong Trading, which according to Bloomberg has appointed advisers to help in talks with banks as some of them freeze credit lines to the firm.

…click on the above link to read the rest of the article…

In Major Reversal, Singapore Imposes Month-Long Lockdown As Asia Faces “Second Wave” Of COVID-19: Live Updates

In Major Reversal, Singapore Imposes Month-Long Lockdown As Asia Faces “Second Wave” Of COVID-19: Live Updates

As we arrive at the end of another week, In NYC, subway trains are still crowded with commuters as the MTA is forced to reduce trains and cars as more of its workforce falls ill or simply refuses to show up. As the number of hospitalized patients surges, the city’s hospital system has already run out of ICU beds, forcing Gov. Cuomo to move coronavirus patients to the Javits Center, which was initially intended for hospital overflow patients. Amid all of this, the state’s unemployment fund is in worrisome shape, meaning New Yorkers will soon need to depend solely on federal benefits if the state well runs dry.

After the global number of confirmed coronavirus cases topped 1 million on Thursday, several Asian territories and countries, including Singapore and Hong Kong, are struggling with a second wave of COVID-19 cases that health officials claim is mostly travel-related. As we reported a few days back, China has reimposed lockdowns as begins to disclose “asymptomatic” cases that government functionaries explained were left out of China’s initial case totals.

One month ago, on March 3, there were 92,000 coronavirus cases, most of them in mainland China. As of Friday, the US and Europe account for the bulk of the world’s more than 1 million confirmed cases.

Professor Gabriel Leung, an epidemiologist at the University of Hong Kong, warned on Friday that the pandemic would likely last a few more months, even if heavy-handed prevention strategies are adopted. He also said the warmer weather would give the world no respite from the virus: “Is warmer weather going to give us some respite?

…click on the above link to read the rest of the article…

US Says New Travel Restrictions “On The Table” As Singapore, Hong Kong Report Sharp Rise In New Cases

US Says New Travel Restrictions “On The Table” As Singapore, Hong Kong Report Sharp Rise In New Cases

Summary:

  • China says 1,716 medical workers have been infected
  • Singapore reports largest daily jump in cases amid increased human-to-human transmission
  • Hong Kong reports 3 new cases
  • Hubei’s new party boss orders quarantine tightened
  • President Xi touts new “biosecurity law”
  • Hong Kong Disney land offers space for quarantine
  • Chinese company says blood plasma of recovered patients useful in combating the virus
  • US mulling new travel restrictions
  • Japan reports 4 new cases; one patient recently returned from Hawaii.
  • CDC Director: Virus is “Coming” to the US.

* * *

Update (0915ET): Japan has reported 4 new cases of the virus, including one man who recently returned from the US state of Hawaii,and another who helped transfer an infected patient diagnosed aboard “the Diamond Princess”, the cruise ship that has been quarantined in Yokohama for 10 days.

Meanwhile, over in the US, this interview of the director of the CDC warning that the virus could become widespread in the US ‘beyond 2020’.

* * *

Update (0850ET): Health and Human Services Secretary Alex Azar said during an interview on Friday morning that more travel restrictions are “on the table,” suggesting that the US might apply similar restrictions to Hong Kong, Singapore, Japan and other Asian countries that have reported rising numbers of cases.

Earlier this month, the State Department raised its travel alert for China to ‘4’, and the US imposed restrictions on foreigners who have recently traveled to China and re-routing Americans who have been to viral hotspots to certain US airports for screening on arrival. These travel restrictions have infuriated Beijing, and prompted a government spokesperson to accuse the US of spreading hysteria.

Even if the virus does “go away” in April, as President Trump has insisted…

…click on the above link to read the rest of the article…

Singapore, Trade and Geopolitics

Singapore, Trade and Geopolitics

The Western media was incredulous. The Donald had disregarded diplomacy, scuttled out of the G7 meeting in Canada without endorsing the G7 agreement, and ended up shaking hands with a previously avowed enemy in Singapore. The formally leisurely pace of global diplomacy, where all is pre-agreed before the photo-op showing unanimity of leadership, was ditched in favour of the Art of the Deal. Foreign correspondents for the established media were confused and obviously out of their depth, particularly over the deal with President Kim Jong-un.

As a female journalist pointed out at the press conference after the meeting, Kim has proven to be ruthless and untrustworthy, killing members of his own family and imprisoning and torturing his own people. How could Trump possibly come to terms with him, and concede, apparently without consulting South Korea, to suspend joint exercises, and agree to the objective of a complete denuclearisation of the peninsular, which is the implication of the eventual withdrawal of American forces entirely from the South?

The Singapore deal was in fact not a deal, but an endorsement of the earlier agreement between the two Koreas at Panmunjom on 27th April. And this is the point, Singapore was the US confirming it accepted Panmunjom.

The razzmatazz of a Singaporean summit plays well to Trump’s electoral base, as did his disdain for G7 and his trashing of Trudeau, who he described as “very dishonest and weak” over trade. Trump’s supporters also buy into his fake-news accusations, conveniently placing him beyond criticism so far as they are concerned. Now they are seeing concrete results from the man they elected President, ahead of the mid-term elections in November.

We need to look into the North Korean situation with greater objectivity, before commenting on recent trade policy developments.

Korea and its economic role in Asia

…click on the above link to read the rest of the article…

‘They’ Have Decided “We Can’t Handle The Truth”

‘They’ Have Decided “We Can’t Handle The Truth”

It’s a fun conceit of science fiction to contemplate the existence of alternative universes.

As Bloomberg’s Richard Breslow points out, when you think they exist in the same time and place, it leaves the realm of the paperback section of the airport newsstand and is better discussed in the Diagnostic and Statistical Manual of Mental Disorders.

This is his full lament:

If you need yet another stark example of the fantasy storytelling we amuse ourselves with, juxtapose today’s Monetary Authority of Singapore policy statement with the storyline that the Asian stock market rally intensified on renewed optimism over the global economy. Singapore is a proxy for trade and “economic growth ground to a halt last quarter.”
We all know why equity markets are zooming. The Bernanke put is standard operating procedure: globally. Whatever is out there’s got central bankers spooked. To use the cliche, they’ve decided we can’t handle the truth. But it’s impossible to fight a manticore you can’t see.

The IMF just portrayed the global economy in decidedly downbeat fashion. Things really are looking much better in Canada, but Governor Poloz took the glass half-empty approach. For G-20 watchers, he also bemoaned the strengthening currency.

Back at the ranch, Fed speakers keep talking about the rate hike pipeline. It’s easy to talk tough when you’re standing behind your mother. And they wonder why futures traders just can’t believe them.

A 10-year Treasury bond yielding 1.76% is not normal. Should you take advice from bond bears or the blowout auction?  

Appreciating currencies of negative interest rate economies that are threatening to do more, may be explained by the unintended consequence factor, but represent policy failure. 

I’m the optimist. I think we can find a way to solve our problems. But it’ll never happen while we continue to dissemble and implement policies that aren’t working.

Source: Bloomberg

The Banking Turmoil Spreads—-Massive Banking Crisis Brewing In Singapore

The Banking Turmoil Spreads—-Massive Banking Crisis Brewing In Singapore

By Singapore Business Review

The three biggest banks are losing capital.

A crisis of staggering proportions is looming in China, and tiny Singapore will be caught right in the middle of the storm once the disaster finally erupts.

Speaking at the annual Barron’s roundtable, Swiss billionaire investor Felix Zulauf warned that Singapore’s largest banks are at risk of massive capital outflows if the Chinese economy experiences a hard landing, which he expects will happen this year.

“We are in a down cycle that will end with crisis and calamity. China in today’s cycle is what US housing was during the financial crisis in 2008,” Zulauf warned.

Zulauf warned that capital outflows in China will continue, prompting regulators to devalue the yuan by as much as 15% to 20% within the year. When this happens, Asian economies which are heavily dependent on China—particularly Singapore—will suffer because Chinese corporates will cut their imports even more, while indebted Chinese companies will be placed at greater risk of default.

“I expect the situation the deteriorate to a point where we will witness a banking crisis in Asia that will hit Singapore and Hong Kong particularly hard,” Zulauf said.

“It is conceivable that Singapore, which has attracted a lot of foreign capital over the years because of its image as a strong-currency state, will be extremely exposed to the situation in China. Singapore’s banking-sector loans have grown dramatically in the past five or six years. Singapore is now losing capital, which means the banking industry is losing deposits,” Zulauf said.

He said that such a situation will cause carry trades to go awry, which will result in steep losses for heavily-leveraged traders.

…click on the above link to read the rest of the article…

“Colossal Defeat” For Obama As Australia Joins China’s Regional Bank

“Colossal Defeat” For Obama As Australia Joins China’s Regional Bank

Having attacked its “closest ally” UK for “constant accomodation” with China, we suspect President Obama will be greatly displeased at yet another close-ally’s decision to partner up with the Chinese-led Asian Infrastructure Investment Bank (AIIB). As The Australian reports, “make no mistake,” the decision by Australia’s Abbott government to sign on for negotiations to join China’s regional bank, foreshadowed by Tony Abbott at the weekend,  “represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted dip­lomacy in Asia.”

As The Australian’s Greg Sheridan writes Op-Ed,

The decision by the Abbott government to sign on for negotiations to join China’s regional bank, foreshadowed by Tony Abbott at the weekend, represents another defeat for Barack Obama’s diplomacy in Asia.

The Abbott government is right to make this decision. It had well-founded concerns about the vague and unsatisfactory governance arrangements of the institution when Beijing first invited Canberra to join.

Those arrangements have ­improved since then and Australia is only signing on to negotiate terms of accession.

If the terms are no good, Australia will ultimately walk away.

Canberra’s move follows similar decisions by Britain, Singapore, India and New Zealand.

Make no mistake — all this represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted dip­lomacy in Asia.

The Obama administration didn’t want Australia to sign up for the China-led AIIB. The Abbott government rightly feels that it owes Obama nothing.

…click on the above link to read the rest of the article…

 

 

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