05/12/2025

FRIDAY | DEC 5, 2025

17

BIZ & FINANCE

Bank of Japan likely to raise rates this month

Exxon to permanently

shut one steam cracker in S’pore SINGAPORE: ExxonMobil plans to wind down operations at the older of its two steam crackers on Singapore’s Jurong Island from March, four sources familiar with the matter said, part of a global petrochemicals sector trend to reduce capacity amid industry losses. The shutdown of the plant, which opened in 2002, is expected to be complete by June, two of the sources said. The sources asked not to be identified because they were not authorised to speak to media. The imminent shutdown of the US major’s first cracker in the Asian oil trading hub comes as chemical producers grapple with losses from overcapacity led by China, the world’s largest consumer of petrochemicals used to make products ranging from plastics and clothes to shoes and cars. “As a matter of practice, we do not comment on market rumors or speculation,” an ExxonMobil spokesperson said in response to Reuters’ queries. The planned shutdown comes after Exxon’s start-up earlier this year of a new steam cracker in the southern Chinese city of Huizhou, which can produce around 1.6 million tpy of ethylene. Exxon has in the past two years gradually scaled down term contract volumes with customers in Singapore, a second of the four sources said. Local buyers will likely switch to offtake from the two remaining ethylene producers in Singapore, traders said. Exxon has a second 1.1 million tpy cracker at Jurong Island which started operations in 2013. South Korea, another major petrochemical hub in Asia, is also seeing sector consolidation. Exxon is considering buying feedstock to continue operating some of its derivative polyolefin units after the cracker’s shutdown, depending on margins, the first source said. “Unless they can secure very low olefins prices, this is unlikely to be economically viable in the long term,“ said Catherine Tan, ICIS senior manager for chemical analytics. Tan expects Exxon to reduce imports of naphtha, the cracker’s main feedstock, as a result of the shutdown. For the first 11 months this year, Exxon imported around 1.5 million metric tonnes of naphtha, compared with nearly 2.5 million tonnes for all of 2024, data from ship-tracking firm Kpler showed. In October, Exxon said it expected to cut 10%-15% of its Singapore workforce by 2027. The US major also agreed to sell its petroleum retail business in the city-state to Indonesia’s Chandra Asri, co-owner of Aster Chemicals which runs the Bukom refinery-petrochemical complex.

Nagahama who told Reuters on Wednesday the premier may accept a December hike if the yen stayed weak. The BOJ’s board is expected to make a final decision after scrutinising upcoming data on domestic wage developments, the US Federal Reserve’s policy decision next week and its impact on financial markets. The market’s focus will likely shift to the central bank’s messaging on how far it will eventually raise interest rates, a topic Ueda remains ambiguous about. Any clarity on the future rate-hike path will likely come from Ueda’s news conference after the December policy meeting. Speaking in Parliament yesterday, Ueda said there was uncertainty on how far the BOJ should hike rates due to the difficulty of estimating the country’s neutral rate of interest, or the level that neither stimulates nor cools growth. The BOJ has produced estimates suggesting Japan’s nominal neutral rate lies somewhere in a range of 1% to 2.5%. – Reuters

a December hike, another source said. The sources spoke on condition of anonymity as they were not authorised to speak publicly. The benchmark 10-year Japanese government bond (JGB) yield hit an 18-year high of 1.930% after the report. Ueda said on Monday the BOJ will consider the “pros and cons” of raising rates this month, signaling a strong chance of a hike at the Dec 18-19 meeting. The remarks led the market to price in a roughly 80% chance of a December rate hike, though some market players focused on how the administration of dovish Prime Minister Sanae Takaichi could react. Finance Minister Satsuki Katayama said on Tuesday she saw no gap between the government and the BOJ on their assessment of the economy, when asked about Ueda’s remarks. Even reflationist aides of Takaichi have not expressed opposition, including government panel member Toshihiro

TOKYO: The Bank of Japan is likely to raise interest rates in December with the government expected to tolerate such a decision, three government sources familiar with the deliberations said. The BOJ looks set to proceed with a hike in its policy rate to 0.75% from 0.5%, which was flagged by Governor Kazuo Ueda in a speech on Monday, the sources said. It would be the first hike since January. “If the BOJ wants to raise rates this month, please make your own decision. That’s the government’s stance,” said one of the sources, adding it was nearly certain the bank will proceed with a hike this month. The administration is prepared to tolerate o Takaichi administration to tolerate central bank’s move, sources say

In September, however, Exxon started operations at a new refining unit at its 592,000 barrel-per-day (bpd) Singapore refinery. – Reuters Indonesia promises action on mining permit violations as Sumatra floods toll tops 800 A man walks past an electronic quotation board displaying 10-year government bonds, an index of long-term interest rates (left) on the Tokyo bond market, in the Japanese capital yesterday. – AFPPIC

covered about 54,000 hectares, the majority of them for mining. Among the permit holders is PT Agincourt Resources, which operates the Martabe gold mine in the Batang Toru ecosystem. In a statement to Reuters this week it said making a direct link between the floods and the mine’s operations was “a premature and inaccurate conclusion”. Between 2001 and 2024, Sumatra as a whole lost 4.4 million hectares of forest, an area bigger than Switzerland, said David Gaveau, founder of deforestation monitor Nusantara Atlas. – Reuters

after the floods have sparked outrage among social media users. Energy Minister Bahlil Lahadalia told evacuated residents in West Sumatra on Wednesday that he would look at revoking mining permits of companies if they were found to have violated rules. “If in our evaluations they have proven to have violated or are not adherent, then we will do our job without any hesitation according to the rules in place,” he said on Wednesday’s visit. Environment-focused group JATAM said legal permits to convert forests into extraction zones

In Indonesia, landslides have cut power and blocked roads, hampering rescuers and aid getting to isolated villages. Environment Minister Hanif Faisol Nurofiq said on Instagram yesterday that the disaster was caused by a changing climate intensifying bad weather events and environmental damage, pointing to shrinking forest cover across the three worst-affected provinces. Green groups said deforestation linked to mining and illegal logging exacerbated the disasters, where landslides left ruins and pools of mud where homes used to be. Images of logs washing ashore on Sumatra

JAKARTA: Indonesia will revoke mining permits if companies are found to have violated rules on flood-ravaged Sumatra island, the energy minister said as questions intensified about the role of deforestation in worsening the deadly disaster. Cyclone-induced floods and landslides have left about 800 dead and 564 missing across the three provinces of West Sumatra, North Sumatra and Aceh, according to government data. The cyclone systems have also killed almost 200 people in Malaysia and Thailand, and followed months of deadly weather in Southeast Asia, including deadly typhoons in the Philippines and Vietnam.