China set to pass U.S. as top oil importer

The rapid redrawing of the world's energy map is about to hit another milestone, with China overtaking the U.S. as the biggest importer of oil.

The Energy Information Agency expects China's monthly net oil imports to exceed those of the U.S. by October, and by next year on an annual basis.

"The imminent emergence of China as the world's largest net oil importer has been driven by steady growth in Chinese demand, increased oil production in the United States, and a flat level of demand for oil in the U.S. market," the EIA said in its latest outlook.
A boom in U.S. oil production is being driven by new technologies, such as hydraulic fracturing -- or fracking -- which are opening up huge reserves for development.
The Paris-based International Energy Agency has forecast that the U.S. could become energy independent by 2030, and the world's biggest producer seven years from now.
Related: U.S. oil boom causing energy upheaval
The U.S. oil boom is boosting the nation's level of reserves, reshaping global oil trade flows and driving up demand and salaries for experienced engineers.
And while China's breathtaking pace of economic expansion has slowed, its demand for oil to fuel a massive manufacturing sector is set to continue growing at a much faster pace than it can ramp up its own production.
Related: China, OPEC and the future of energy
China demand for liquid fuels will have grown by 13% between 2011 and 2014 to more than 11 million barrels per day, while its production will increase by just 6%, according to the U.S. EIA.

 

Fracking fight hits England

Over the same period, U.S. total annual oil production will have risen by 28% to nearly 13 million barrels per day, as demand hovers around 18.7 million, well below the 2005 peak of 20.8 million, the EIA said.

Nnamdi Armstrong
C.E.O 

Sloane International Investments Ltd

+23408162319833

Apple's store headache

Apple Stores are one of Steve Jobs' greatest legacies, but the retail business has been a headache for Apple lately.

The latest migraine: The friendly, t-shirt wearing retail workers helping you pick out your latest iPhone filed a class-action lawsuit late last month, suing the tech giant over unpaid wages.

Two former workers claim that they were required to wait in line for a manager to check their bags for stolen goods before leaving the store -- but after clocking out. Some days the wait was longer than five or ten minutes, which added up to $1,500 in unpaid wages per year for one worker, according to the lawsuit. Apple (AAPL, Fortune 500) Store employees typically make between $12 and $18 per hour.
That's small change for a company that has brought in more than $79 billion in sales so far this year. The lawsuit could damage Apple's sterling reputation, said Robert Passikoff, president of brand research consultancy Brand Keys.
"It begins to raise questions. And you don't want a question mark next to your brand," said Passikoff. "That jars people."
Apple did not respond to a request for comment.
Related story: An Apple store is worth as much as the White House
But Apple has been down this road before. A year ago this week, Apple began laying off recent Apple Store hires to make its retail operation leaner. The problem: Apple has been praised for its ubiquitous help, and the cuts were made smack in the middle of the busy back-to-school season.
Apple later reversed course and publicly admitted the layoffs were a "mistake." The company fired John Browett, its retail chief, two months later.
Sales at Apple Stores have also begun to sink, and visits are down. This past quarter, Apple Stores averaged 16,000 visitors per store each week, down from 17,000 during the same period a year earlier.
That's not a shock, considering Apple released a new iPad in March 2012 -- and hasn't updated it since. But here's a worrisome number: Per-store revenue fell 9% year-over-year, while Apple's overall sales were up 1%.
Meanwhile, AT&T (T, Fortune 500), Microsoft (MSFT, Fortune 500) and many others have attempted to replicate Apple's retail model. Though they've had varying degrees of success, the seamless shopping experience is no longer unique to Apple.
The Apple Store's success isn't something the company wants to mess with. Apple Stores are by far the most valuable retail spaces in the world measured by sales per square feet, according to industry publication RetailSails. Last year, they outpaced Tiffany's (TIF) in that measure by 40%.
But if Apple were to create a new vision for the Apple Store, it's not clear where that would come from. For now, the Apple Store is leaderless.
Apple has yet to find a permanent replacement for Browett, who only lasted fewer than 10 months in the job. He replaced Ron Johnson, who is largely credited with developing Apple's retail strategy. Johnson left for J.C. Penney (JCP, Fortune 500) in 2011 ... though he's currently available.

 

Nnamdi Armstrong

C.E.O 

Sloane International Investments Ltd

+23408162319833

Chinese producers benefit amid New Zealand milk scare

Chinese dairy companies are basking in a rare moment. This time, they're not the ones under scrutiny for food safety -- it's a New Zealand firm.

Over the weekend, the world's largest dairy exporter, Fonterra, revealed that some of its products were contaminated with a bacteria that could cause botulism. The bacteria was found in whey protein, produced by the New Zealand company, for sale to other companies for use in consumer products.

Now, China has suspended imports of some whey protein and milk-based powder sourced from Fonterra.
This isn't great news for New Zealand, as China is its top trading partner. But it's turning out to be a bit of a boon for some Chinese dairy and infant formula companies.
Guangzhou-based infant formula maker Biostime and China Modern Dairy both surged by 9.8% in Hong Kong trading. Yashili International closed up 2.5%. China Mengniu Dairy closed down 1.4%, erasing earlier gains.
At the same time, Want Want China, a company that sources most of its raw milk from Fonterra, tumbled 3.2%.
China has pledged to boost food safety measures after tainted baby formula killed at least six infants and sickened another 300,000 in 2008. Nearly all major Chinese makers of milk powder were found to be contaminated with the toxic chemical melamine. The additive caused the formula to appear to have a higher protein content.
Related story: China probes baby milk price fixing
Chinese families, fearful of tainted formula, have been scouring the globe for milk they perceive to be safer. The rush has created shortages as far afield as the U.K. As a result, foreign baby formula brands such as Nestle (NSRGF) and Mead Johnson (MJN) have surged in popularity.
Not all foreign-sourced baby formula have continued to benefit from Chinese consumer preferences for non-domestic brands. Infant formula products from New Zealand have received additional scrutiny lately as Chinese companies have been buying up dairy farms in the country.
"People are saying they don't trust it any more than a Chinese source," said China Market Research analyst Ben Cavender. Consumers are becoming more concerned, Cavender said, that there's greater risk of "cutting corners, cutting costs" as Chinese businesses become more involved.
Last year, the New Zealand government approved the sale of 16 farms, including dairy farms, to Chinese developer Shanghai Pengxin Group.

 
Nnamdi Armstrong

C.E.O 

Sloane International Investments Ltd

+23408162319833

Dell raises takeover offer again

Michael Dell and private equity firm Silver Lake sweetened their offer for Dell Friday morning, increasing their takeover price to $13.75 per share and adding a special dividend of 13 cents a share.

 

 

 

 

 

 Shares of Dell (DELL, Fortune 500) surged more than 5% on the news. But the drawn-out merger saga is not over just yet. 

 

Dell's board postponed the shareholder vote on the deal to September 12. To get Dell's board to agree to the vote, Silver Lake and Dell agreed that shareholders who abstain from voting will not be counted. Originally they had proposed that abstainers would be counted as voting for the deal.
Related: Dell rejects revised bid, but with a giant escape clause
"We believe modifying the voting standard is in the best interests of Dell shareholders, both because it has enabled us to secure substantial additional value and because it provides a level playing field for the decision facing shareholders," said Adam Mandl, the chairman of Dell's special committee.
The battle for control of the PC maker founded by Dell in his University of Texas dorm room in 1984 has been hotly contested since Dell and Silver Lake proposed a leveraged buyout in February.
Activist investor Carl Icahn, who holds roughly 8% of Dell's shares, has been fighting Michael Dell and Silver Lake's attempts to take the company private. Icahn has said that he wants to run Dell and has possible CEO candidates in mind to run the company. He has chastised the company's board and Michael Dell in interviews and on Twitter.
One recent Tweet from Icahn: "All would be swell at Dell if Michael and the board bid farewell."
And in response to Friday's Dell decision, Icahn said in a statement that "the war is far from over."
"Michael Dell's offer substantially undervalues the company. We believe that an increase of a mere 13 cents is an insult to shareholders," he added,
Icahn pledged to continue to fight Dell's board in court over its plans to hold a vote on a different day than the company's annual meeting.
If successful, the Dell deal would be one of the largest leveraged buyouts in history.
Related: Icahn says he wants to run Dell
Dell has been trying to reduce its reliance on the PC market and shift to hot businesses like cloud computing, storage and corporate software. About half of Dell's sales come directly from PCs, and another 20% comes from PC peripherals like monitors, keyboards and printers.
But the problem for Dell is that its competitors, most notably Hewlett-Packard (HPQ, Fortune 500) and IBM (IBM, Fortune 500), are trying to do the same thing.
Dell hopes that by going private, it can more nimbly restructure and adjust its business without having to answer to shareholders. Going private can take a the company out of the quarter-to-quarter grind of meeting Wall Street's expectations. But it also means Dell will have less access to funds to make large acquisitions that could help transform the company.

 

The battle for Dell

Silver Lake seems to be in a position to win big even if the bid is scuttled by Icahn. But it has more incentive to get the deal done now. That's because Dell said Friday that the breakup fee Silver Lake would earn if the deal is called off has been reduced to $180 million from $450 million earlier.
 Silver Lake declined to comment further on this proposal.

 Nnamdi Armstrong

C.E.O 

Sloane International Investments Ltd

+23408162319833

Investors like Morgan Stanley's earnings

Morgan Stanley's shares rose in premarket trading.

NEW YORK (CNNMoney)

Investors were impressed with Morgan Stanley's second quarter results, which were driven by strong revenue from investment banking and wealth management.

Shares jumped more than 5% in premarket trading.

The bank reported second-quarter net revenue of $8.5 billion, and earnings per share of 43 cents. The bank took a charge of 8 cents related to the acquisition of its remaining 35% stake in brokerage firm Morgan Stanley Smith Barney.
Analysts had expected Morgan Stanley to report a profit of 43 cents per share on revenues of $7.9 billion.
Morgan Stanley's earnings show the bank is having some success in building up its wealth management business -- operations that are safer than its volatile trading business.
Revenues from the wealth management division jumped 10% from last year, while profits surged 60%.
Related: Bank of America profit rises 63%
Its investment banking and trading results also continued to grow.
Morgan Stanley (MS, Fortune 500) is the last big banks to report quarterly earnings. Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Wells Fargo (WFC, Fortune 500), all reported earnings that soared well above expectations.

COMMODITIES

Investors worried about the market gyrations and rising bond yields are once again favoring gold.     
Energy Fix stories »

Energy New York Mercantile		Last		Change	% Change	52-week price range	Last Update
Oil (Light Crude) July 2013 contract $ / barrel	Floor	91.97		-1.64	-1.75%	81.00 Today||| 99.03	May 31
	Electronic	91.83		-1.97	-2.11%	81.79 Today||| 99.18	4:46am ET
Heating Oil July 2013 contract $ / gallon	Floor	2.78	s	-0.0628	-2.21%	2.53 Today||| 3.21	May 31
	Electronic	2.78		-0.0589	-2.07%	2.51 Today||| 3.27	4:46am ET
Natural Gas July 2013 contract $ / million BTUs	Floor	3.98		-0.039	-0.97%	2.21 Today||| 4.22	May 31
	Electronic	3.98		-0.044	-1.09%	3.32 Today||| 4.53	4:42am ET
Unleaded Gas July 2013 contract $ / gallon	Floor	2.75		-0.0524	-1.87%	2.70 Today||| 3.17	May 31
	Electronic	2.75		0.00	0.00%	2.46 Today||| 3.32	May 31

s = Floor trades settled

Metals New York Mercantile		Last		Change	% Change	52-week price range	Last Update
Gold Aug. 2013 contract $ / troy ounce	Floor	1,393.00		-19.00	-1.35%	1,370 Today||| 1,794	May 31
	Electronic	1,398.40		+5.40	+0.39%	1,385 Today||| 1,628	4:46am ET
Silver July 2013 contract $ / troy ounce	Floor	22.24		-0.447	-1.97%	23.33 Today||| 34.43	May 31
	Electronic	22.41		+0.167	+0.75%	20.25 Today||| 35.45	4:46am ET
Platinum July 2013 contract $ / troy ounce	Floor	1,461.80	s	-20.90	-1.41%	1,436 Today||| 1,699	May 31
	Electronic	1,468.00		-28.50	-1.92%	1,375 Today||| 1,745	4:45am ET
Copper July 2013 contract $ / pound	Floor	3.29		-0.023	-0.69%	3.08 Today||| 3.83	May 31
	Electronic	3.34		+0.05	+1.52%	3.05 Today||| 3.84	4:46am ET

s = Floor trades settled

Agriculture Chicago Board of Trade		Last		Change	% Change	52-week price range	Last Update
Corn Dec. 2013 contract ¢ / bushel	Floor	567.25	s	+4.25	+0.75%	560.75 Today||| 840.00	May 31
	Electronic	569.50		+4.50	+0.80%	554.60 Today||| 849.00	4:58am ET
Soybeans July 2013 contract ¢ / bushel	Floor	1,510.00	s	+13.00	+0.87%	1,337 Today||| 1,784	May 31
	Electronic	1,528.25		+14.50	+0.97%	1,332 Today||| 1,789	5:00am ET
Wheat July 2013 contract ¢ / bushel	Floor	705.50	s	+6.00	+0.86%	608.00 Today||| 942.50	May 31
	Electronic	709.75		+8.25	+1.18%	607.50 Today||| 947.25	5:01am ET

s = Floor trades settled

Meat & Livestock Chicago Mercantile		Last		Change	% Change	52-week price range	Last Update
Lean Hogs July 2013 contract ¢ / pound	Floor	93.85	s	+0.45	+0.48%	70.45 Today||| 96.15	May 31
	Electronic	94.08		+0.45	+0.48%	70.38 Today||| 96.33	May 31
Live Cattle Aug. 2013 contract ¢ / pound	Floor	120.45	s	+1.50	+1.26%	115.40 Today||| 134.40	May 31
	Electronic	120.40		+0.95	+0.80%	115.33 Today||| 134.50	May 31
Feeder Cattle Aug. 2013 contract ¢ / pound	Floor	144.32	s	+0.175	+0.12%	133.10 Today||| 161.50	May 31
	Electronic	144.52		+0.325	+0.23%	133.00 Today||| 161.50	May 31

s = Floor trades settled

Consumer New York Mercantile		Last		Change	% Change	52-week price range	Last Update
Cocoa March 2014 contract $ / metric ton	Electronic	2,215.00		0.00	0.00%	2,060 Today||| 2,672	May 31
Coffee March 2014 contract ¢ / pound	Electronic	136.05		0.00	0.00%	134.20 Today||| 193.55	May 31
Cotton July 2013 contract ¢ / pound	Electronic	79.20		-2.51	-3.13%	65.50 Today||| 93.76	Jun 02
Sugar #11 July 2013 contract ¢ / pound	Electronic	16.55		+0.05	+0.30%	15.91 Today||| 23.79	3:38am ET

Turning trash into dollars

Garbage? To David Steiner, it's "all good."

(Fortune)

There's more than a shred of truth to the phrase "one man's trash is another man's treasure." In this instance, the other man is Waste Management CEO David Steiner, whose company turns waste of all kinds into renewable energy and valuable recycled commodities. Waste Management operated 269 active landfills and 114 recycling facilities in 2012. It processes more than 12 million tons of recyclable materials alone. Fortune's Adam Lashinsky interviewed Steiner, who has been the CEO for nine years, to discuss the challenges of recycling, China's environmental footprint, renewable energy, and the future of garbage. A lightly edited transcript follows.

Fortune: Just to get things started, if you could give an overview of the company: Where are you, how big are you, who are you?
David Steiner: Yeah. So we do basic solid waste services throughout the United States and Canada. So when I say basic solid waste services, we're talking about recycling, we're talking about waste-to-energy, and then we're talking about all sorts of different types of collection and disposal for -- all the way from your household to big businesses to small businesses. We're covering them all, about 22 million customers throughout the United States and Canada.
And then about five years ago we went into waste-to-energy internationally. So what you've got is China has two problems: not enough electricity and a lot of garbage. What's the best solution? Burn the garbage to create electricity. So we have a joint venture in China where we're building waste-to-energy plants. And then we've got another joint venture in -- predominantly in England, but throughout Europe where we're building waste-to-energy plants.
So when you look at it, we're about 10% of our business is recycling, about 10% of it is waste-to-energy. Those two are growing faster than anything else we do in our business. We're seeing growth rates on recycling in our business at about 15 to 20% a year. We'll see that same kind of growth rate in waste-to-energy.

Nnmadi E. Armsrtong
23408162319833, 23408122735908
stone4sloane@gmail.com