Your Monday morning coffee briefing from TFG. Here are some of the last week’s updates from the trade sector. Disruption in Chinese production could radiate out to the rest of the world through complex supply chains. OPEC gearing up for deeper oil cuts. Commodity trade finance blockchain komgo acquires TRAFEC. DBS completes Audi cars LCs through Singapore Networked Trade Platform. [/box]
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Chinese production could radiate out to the rest of the world through complex supply chains
Apple’s main plant for iPhone production in Henan, run by Foxconn, was closed last week because of the virus. Manufacturers that rely on Chinese inputs from the affected area may struggle to maintain production. South Korean automaker Hyundai has halted production at all its Korean plants after exhausting its stock of Chinese components. Automakers in Europe and the US report that they are weeks away from doing the same. The Nikkei Asian Review reported that key suppliers to Apple are expecting labour shortages due to travel restrictions. Read more →
OPEC gearing up for deeper oil cuts
OPEC’s advisers have called for deeper oil supply cuts in response to the negative impact the coronavirus is having on oil demand. The oil price has fallen 22% to $56/b over the last month. OPEC’s actions in the past have angered U.S. President Donald Trump, who has repeatedly demanded OPEC’s de facto leader Saudi Arabia bring oil prices down if it wants Washington’s to provide Riyadh with military support against arch-rival Iran.
In the past few months, Trump has said little on OPEC but that might change later in 2020 if oil and gasoline prices rise – a politically sensitive issue in the United States. Trump will seek re-election in November. Read more →
China to halve tariffs on some US imports
China on Thursday said it would halve additional tariffs levied against 1,717 U.S. goods last year, following the signing of a Phase 1 deal that defused a bruising trade war between the world’s two largest economies.
While the announcement reciprocates the U.S. commitment under the deal, it is also seen by analysts as a move by Beijing to boost confidence amid a virus outbreak that has disrupted businesses and hit investor sentiment. Read more →
Azimo gets €20 million in debt financing from EIB
Azimo, the European money transfer service, has entered into a €20 million debt agreement with the European Investment Bank (EIB). The loan will help Azimo accelerate its expansion, product development, and grow its technical team in Kraków, where the majority of its staff is located.
Headquartered in London, the fintech company offers cross-border money transfers with an emphasis on speed and affordability. Aware that many overseas workers send their paychecks back home (to the tune of nearly $650 billion per year), Azimo works toward the UN Sustainable Development Goals of financial inclusion and inequality reduction. Read more →
Commodity trade finance blockchain komgo acquires TRAFEC
Earlier last week, blockchain firm komgo announced it bought another commodity trade finance platform, TRAFEC. The acquired company has almost 100 corporates on the platform and was founded in 2011 by Swiss association STSA and banks. Read more →
Trump ‘apoplectic’ with UK’s Johnson over Huawei decision
U.S. President Donald Trump was “apoplectic” with Boris Johnson during a phone call to discuss the British prime minister’s decision to allow Chinese firm Huawei a role in Britain’s 5G mobile phone network, the Financial Times reported on Thursday.
Citing unnamed officials in London and Washington, the FT said the president was livid during the exchange last week after Johnson’s government said Huawei could have a limited role in building Britain’s 5G mobile network, despite warnings from the Trump administration. Read more →
DBS completes Audi cars LCs through Singapore Networked Trade Platform
Singapore, 06 Feb 2020 – Advancing Singapore’s trade digitalisation agenda, DBS Bank, in collaboration with Audi Singapore (Audi) and Audi’s local distributor, Premium Automobiles (Premium), completed the first trade financing transaction on Singapore’s Networked Trade Platform (NTP). The inaugural trade relates to an SGD3.5 million letter of credit transaction for a trade of Audi cars between Audi and Premium. Read more →
