13/05/2025

BIZ & FINANCE TUESDAY | MAY 13, 2025 17 Traders relabel Venezuelan oil as Brazilian for China: Sources SINGAPORE: Traders have rebranded more than US$1 billion (RM4.3 billion) of Venezuelan oil shipments to China as Brazilian crude over the past year, according to two tanker tracking firms, company documents and four traders, helping buyers to cut logistics costs and circumvent US sanctions. Independent refiners in China are the main buyers of seaborne oil shipments from countries sanctioned by the US, with offshore Malaysia serving as a key transshipment hub for Venezuelan and Iranian crude. Since July 2024, however, traders have also rebranded Venezuelan oil as from Brazil. This has enabled tankers to sail directly from Venezuela to China, skipping the stop-over in waters off Malaysia and shortening the voyage by about four days. Washington has imposed sanctions on Venezuelan energy exports since 2019 to reduce the oil export revenue that funds the government of President Nicolas Maduro, who has held power for more than a decade with elections that observers say were fraudulent. Maduro and his government have rejected sanctions by the US and others, saying they are illegitimate measures that amount to “economic war” and are designed to cripple Venezuela. Since sanctions have been in place, oil traders have transferred oil from one ship to another at sea to disguise the origin of Venezuelan crude before it is shipped to China, which is the world’s biggest crude importer. More recently, shippers have tampered with the tankers’ location signal to make it look like vessels are departing from Brazilian ports when they are actually sailing from Venezuela, according to maritime data, satellite imagery and shoreside photos compiled and analysed by monitoring service TankerTrackers.com. This practice is known as spoofing. According to Chinese customs data, China imported about 2.7 million metric tonnes, or 67,000 barrels per day (bpd), of mixed bitumen from Brazil between July 2024 and March 2025, worth US$1.2 billion. Chinese refiners regularly buy Brazilian crude but Brazil rarely exports any bitumen blend, according to state oil company Petrobras. Brazilian customs data records no export of bitumen blend to China since at least 2023. Mixed bitumen, or bitumen blend, is a tar-like residue for processing into asphalt. However, Brazil’s typical crude grades for export are classified as medium-sweet oil from its prolific offshore fields known as pre-salt. “What we export to China is mainly crude oil from the pre-salt, it’s not bitumen,“ Petrobras CEO Magda Chambriard told reporters on the sidelines of a conference in Houston last week. Many crude cargoes entering China branded as Brazilian bitumen actually contain Venezuela’s Merey, the flagship heavy crude typically bought by China’s independent refiners from Venezuela’s state-run PDVSA through intermediaries, according to the trading sources, tanker tracker Vortexa Analytics and internal PDVSA documents reviewed by Reuters. Traders have long branded Merey as bitumen blend, Chinese traders have said, because refiners do not need government crude oil import quotas to bring in the tar-like oil. To effect the switch, dealers change the documentation of the shipments to Brazilian origin by providing a new certificate of origin for the oil, without sending vessels near Brazil or going through any ship-to-ship operations, three of the traders said. This year, several vessels chartered by an intermediary of Venezuelan crude, Hangzhou Energy, have “spoofed” their signals – artificially placing them in Brazil while loading in Venezuela, according to PDVSA documents and the data compiled by TankerTrackers.com. – Reuters

US, China to slash tariffs in trade war de-escalation

GENEVA: The US and China announced Monday an agreement to drastically reduce tit-for-tat tariffs for 90 days, de-escalating a trade war that has roiled financial markets and raised fears of a global economic downturn. After their first talks since US President Donald Trump launched his trade war, the world’s two biggest economies agreed in a joint statement to bring their triple-digit tariffs down to two figures and continue negotiations. US Treasury Secretary Scott Bessent described the weekend talks with Chinese Vice Premier He Lifeng and international trade representative Li Chenggang as “productive” and “robust”. “Both sides showed a great respect,” Bessent told reporters. US President Donald Trump had imposed duties of 145% on imports for China last month – compared to 10% for other countries in the global tariff blitz he launched last month. Beijing hit back with duties of 125% on US goods. Bessent said the two sides agreed to reduce those tariffs by 115 percentage points, taking US tariffs to 30% and those by China to 10%. In their statement, the two sides agreed to “establish a mechanism to continue discussions about economic and trade relations”. China hailed the “substantial progress” made at the talks. “This move... is in the interest of the two countries and the common interest of the world,” the Chinese commerce ministry said, adding that it hoped Washington would keep working with China “to correct the wrong practice of unilateral tariff rises”. The dollar, which tumbled after Trump o Both sides agreed to cut levies by 115 points, bringing American rates to 30% and Beijing’s to 10% The electric-vehicle battery maker is selling 117.9 million shares at a maximum offer price of HKUS$263 per share, according to filings lodged with the Hong Kong Stock Exchange. The size of the deal could increase to about US$5.3 billion (RM23 billion) if an offer size adjustment option and a so-called greenshoe option are exercised. CATL’s shares in Shenzhen rose 3.6% on Monday after the Hong Kong deal was launched, reaching a six-week high. The gain outpaced a 0.9% lift in China’s blue-chip CSI300 index. CATL raising US$4 billion means the listing is the biggest in the world so far this year, according to Dealogic data, beating JX Advanced Metal’s US$3 billion March IPO in Tokyo. In Hong Kong, the share sale will be the largest since Midea Group raised US$4.6 billion last year. More than 20 cornerstone investors, led by Sinopec and Kuwait Investment Authority, have subscribed to buy about US$2.62 billion

The trade dispute between Washington and Beijing has rocked financial markets, raising fears the tariffs would rekindle inflation and cause a global economic downturn. – REUTERSPIX

CATL’s Hong Kong shares will be sold at a small discount to the Shenzhen stock’s closing price on Friday if the shares price at HK$263 each and are due to start trading on May 20. The prospectus said CATL was granted a Hong Kong Stock Exchange waiver to not publish a minimum price the shares could be sold at as it could impact the trading of its Shenzhen-listed stock. US onshore investors will not be able to buy CATL shares in the Hong Kong deal, the filings showed, but many of those funds have offshore operations that would be able to participate. The company was placed on a US Defense Department list in January of Chinese companies it says work with China’s military. CATL said in its prospectus it was working with the US department to address the “false designation”. “It does not restrict us from conducting business with entities other than a small number of US governmental authorities, thus is expected to have no substantial adverse impact on our business,“ it said. – Reuters signalled he might lower the tariffs, suggesting on social media that an “80% Tariff on China seems right!” However, White House Press Secretary Karoline Leavitt later clarified that the United States would not lower tariffs unilaterally, saying China would also need to make concessions. The Geneva meeting came days after Trump unveiled a trade agreement with Britain, the first with any country since he unleashed his blitz of global tariffs. The five-page, nonbinding deal confirmed to nervous investors that Washington was willing to negotiate sector-specific relief from recent duties. But Trump maintained a 10% levy on most British goods, and threatened to keep it in place as a baseline rate for most other countries. – AFP

worth of CATL shares, the prospectus showed. The order book for the institutional tranche of 109.1 million shares has already been covered with demand from investors, according to two sources with direct knowledge of the matter. The sources could not be named discussing information that was not yet made public. CATL did not immediately respond to a request for comment on the demand. The offer size adjustment option means the number of shares could be increased by up to 17.7 million shares to raise up to an additional HK$4.65 billion. There is a greenshoe option to sell a further up to 17.7 million shares. The shares are due to price between Tuesday and Friday, with the final price to be announced on or before May 19, the filings showed. There will be 8.8 million shares available for Hong Kong’s retail investors to bid for, the prospectus showed. The company said about 90% of the proceeds raised, about HK$27.6 billion, would be spent on the construction of its planned Hungary factory, part of its plan to make batteries in Europe for automakers such as BMW, Stellantis and Volkswagen. The first phase of the factory, in which it is launched his tariff blitz in April, rallied on the news while US stock futures soared. European and Asian markets also rallied. The trade dispute between Washington and Beijing has rocked financial markets, raising fears the tariffs would rekindle inflation and cause a global economic downturn. The head of the World Trade Organisation, Ngozi Okonjo-Iweala, praised the talks on Sunday as a “significant step forward” that “bode well for the future”. “Amid current global tensions, this progress is important not only for the US and China but also for the rest of the world, including the most vulnerable economies,” she added. Ahead of the meeting at the discreet villa residence of Switzerland’s ambassador to the United Nations in Geneva, Trump had

EV battery maker CATL to raise at least HK$31b in Hong Kong listing SHANGHAI: Chinese battery manufacturer CATL aims to raise at least HK$31.01 billion (RM16.7 billion) in its Hong Kong listing, according to its prospectus filed on Monday, the largest listing globally so far in 2025. investing €2.7 billion (RM13 billion), is due to start producing batteries this year. It aims to begin construction on the second phase later this year.