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BUSINESSTuesday 19 January 2016
Global Markets: EU shares drop; oil slide continues Tata Steel set for
ELAINE KURTENBACH
AP Business Writer
TOKYO (AP) — European
shares lost early gains to
close lower on Monday,
despite a rebound in the
wobbly Shanghai Compos-
ite index, as the price of oil
extended its recent losses.
KEEPING SCORE: Ger-
many’s DAX, which had
opened 1.2 percent higher,
declined over the course of
the day to end 0.3 percent
lower at 9,521.85. The CAC
40 of France fell 0.5 percent
to 4,189.57 and Britain’s
FTSE 100 shed 0.4 percent
to 5,8779.92. U.S. markets
were closed for a public
holiday. But Dow and S&P
futures shed 0.1 percent.
IRAN, ENERGY: The nuclear
deal between Iran, the U.S.
and five other world pow-
ers took effect over the
weekend, ending a Euro-
pean oil embargo on the
world’s seventh-largest oil
producer. That is reinforc-
ing expectations that pric-
es will remain weak as sup-
ply overwhelms demand.
Benchmark U.S. crude was
down 1.6 percent to $28.94
a barrel in electronic trad-
ing on the New York Mer-
cantile Exchange. The con-
tract fell to $29.42 a barrel
on Friday. Brent crude, a
benchmark for interna-
tional oils, fell 1.1 percent
to $28.62 per barrel. It fell to
$28.94 in London on Friday.
CHINA ECONOMY: On
Iran to boost oil output by 500,000 barrels has depressed prices, and
ALI AKBAR DAREINI
Associated Press
TEHRAN, Iran (AP) — Iran
is aiming to increase its
oil production by 500,000
barrels per day now that
sanctions have been lifted
under a landmark nuclear
deal with world powers, a
top official said.
In comments posted on
the Oil Ministry’s website
Monday, Deputy Oil Minis-
ter Roknoddin Javadi said
Iran is determined to retake
its share of the oil market,
which plunged after crip-
pling sanctions were im-
posed in 2012.
The U.N. nuclear agency
certified Saturday that Iran
has met all its commitments
under last summer’s agree-
ment, prompting the lifting
Tuesday, attention will turn
to China, where fourth-
quarter growth figures will
likely show that strong con-
sumer spending offset slow-
ing investment, keeping
A man walks by an electronic stock board of a securities firm in Tokyo. European shares lost early
gains to close lower on Monday, despite a rebound in the wobbly Shanghai Composite index, as
the price of oil extended its recent losses.
growth in the last quarter at
about 6.8 percent or high-
er, analysts say. But recent
volatility in Chinese markets
has overshadowed those
trends toward stabilization
in China’s growth picture.
of a broad range of eco-
nomic sanctions, includ-
ing those covering the oil
industry. Other sanctions
unrelated to Iran’s nuclear
program remain in place.
Iran used to export 2.3 mil-
lion barrels per day but its
crude exports fell to 1 mil-
lion in 2012. Iran’s total pro- duction comes “at a very
duction currently stands at
3.1 million barrels per day.
“In the wake of removal of
sanctions, Iran is prepared
to increase its crude output
by 500,000 barrels per day.
Today, a government order
was issued to increase pro-
duction,” Javadi said, add-
ing that it will take a year to “Our view is that Iranian
return to pre-sanctions pro-
duction levels.
Oil prices have recently
plummeted to under $30
THE QUOTE: “Nerves are still
heavily focused on China
as we approach a major
economic data dump from
China,” Angus Nicholson of
IG said in a commentary.
ASIA’S DAY: Japan’s Nik-
kei 225 fell 1.1 percent to
16,955.57 and Hong Kong’s
Hang Seng lost 1.5 percent
to 19,237.45. The Shang-
hai Composite rebounded
from early losses, gaining
a barrel, the lowest in 13
years. Javadi said an over-
supply of some 2 million
barrels a day is to blame.
Barclays analysts Alia Mou-
bayed and Michael Cohen
wrote in a research note to
investors that the anticipat-
ed ramp-up in Iranian pro-
bad time” for the oil market
given the existing pressure
on prices.
“It is too early to say what
kind of market impact
Iran’s return will have or
how much of Iran’s return
is already priced in,” they
wrote.
wellhead production and
sales from existing onshore
and offshore storage will
surprise the market initially, ta are should be blamed.
layoffs amid cheap
0.4 percent to 2,913.84
and South Korea’s Kospi Chinese imports
was nearly unchanged at
1,878.45. Australia’s S&P/ DANICA KIRKA
ASX 200 fell 0.7 percent to Associated Press
4,858.70. Shares in Taiwan LONDON (AP) — Manufac-
turer Tata Steel on Monday
announced it will cut 1,050
jobs in Britain as part of
cost-savings plans to com-
pete against cheap Chi-
(AP Photo/Koji Sasahara) nese imports, raising the
clamor for government in-
were higher but markets in tervention to protect strug-
New Zealand and South- gling industries.
east Asia declined. The layoffs, largely in
CURRENCIES: The dollar Wales, come just months
rose to 117.37 yen from after an earlier round of
117.00 yen. The euro fell to cuts in the industry, includ-
$1.0894 from $1.0913.q ing 1,200 slashed by Tata in
October.
Another company, Saha-
viriya Steel Industries, an-
nounced the closure of its
Redcar plant last fall with
the loss of 2,200 jobs while
Caparo Industries went
into administration, putting
more jobs at risk.
“We need the European
Commission to acceler-
ate its response to unfairly
traded imports and in-
crease the robustness of its
actions,” said Karl Koehler,
chief executive of Tata
Steel’s European opera-
tions. “Not doing so threat-
ens the future of the entire
European steel industry.”
The British government has
been under pressure to
raise the issue of China sell-
ing steel at a loss on world
markets.
The oversupply of steel
manufacturers want anti-
as the country shows its dumping duties to be im-
muscle, leading to down- posed.
ward price pressure,” they Prime Minister David Cam-
added. eron described the layoffs
They estimate that Iran as “sad news,” and has
already has some 46 mil- promised to work with lo-
lion barrels of petroleum cal communities to lessen
pumped and stored off- the blow.
shore and another 30-40 “We’ll continue to work
million barrels reportedly with them and I want to
in storage on land. They have a strong British steel
expect it will try to quickly industry at the heart of our
reclaim lost market share in important manufacturing
Europe, but getting addi- base,” he said.
tional sales out of custom- Though Cameron argued
ers such as India and China the government had tak-
could prove trickier. en action, his critics sug-
Iran has vowed to boost gest Britain has been reluc-
crude exports and retake tant to take on China at a
its market share even if time when so many busi-
prices fall further, saying fel- nesses in the country want
low OPEC members export- to step up trade. Unions
ing more oil than their quo- have accused the govern-
ment of failing to deliver on
promises to help.q