Category Archives: General

A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand

GCL System Integration Technology Co. plans to build the world’s biggest solar-panel manufacturing plant, with capacity to meet half of global demand.

The Chinese manufacturer plans to invest 18 billion yuan ($2.54 billion) to construct a facility in eastern Hefei province that will be able to produce 60 gigawatts of solar panels a year, GCL System said in a filing to the Shenzhen stock exchange on March 27. It didn’t provide a timeline.

The plant’s maximum output is double the 30 gigawatts of capacity installed in China in 2019, and would be able to supply to almost 51% of solar installations worldwide. The project will boost GCL System’s ability to produce panels more than nine-fold from 7.2 gigawatts, according to data from BloombergNEF. The world’s biggest solar-panel maker, JinkoSolar Holding Co,. has 16 gigawatts of capacity.

Chinese solar manufactures have announced expansion plans in recent months amid a push to grab greater market share and reduce costs, which analysts say could signal more pain ahead for the industry.

GCL System said it will spend 5 billion yuan on the first phase of the project, for 15 gigawatts of production capacity. Another three phases will be implemented later, with the timing based on sales and utilization of the facility, it said.

The company said it wants to seize opportunities that are emerging with solar-power costs now closer to coal power and meet demand for the new type of larger photovoltaic panels. GCL System will use its own funds and loans to finance the investment, it said.

GCL System had a market value of almost 17 billion yuan as of Friday’s market close. It had 4.03 billion yuan of cash as of the end of the third quarter last year.

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IMF Chief: World economy has entered a recession ‘as bad or worse’ than the global financial crisis

IMF chief Kristalina Georgieva said it’s “clear” that the global economy has “entered recession” due to the evolving Covid-19 pandemic, and that the organization is working on projections to assess how severe it will be.

Georgieva said she expects the recession to be “quite deep.” Recovery is projected for 2021, but only if the virus can be contained, she said.

She said countries needed to step up their response measures aggressively, adding that the IMF has received a large number of requests for emergency financing. Georgieva said the international body has received pledges from Britain, Japan, and China for a “catastrophic containment and relief trust” for the poorest countries and that she hopes more will follow.

A key concern about a long- lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but can erode the fabric of our societies.

She predicted that emerging markets will need assistance of $2.5 trillion, and that estimate is “on the low end.” A practical approach will be needed to prevent indebted countries from “falling off the cliff,” she said.

Speaking about the US in particular, Georgieva said it will be absolutely necessary to cushion the world’s biggest economy and said the $2 trillion package of measures already agreed on by the Trump administration was a welcome step.

She said it is important to protect workers and families from sudden loss of income, and that it is also critical to protect companies.

The IMF boss also confirmed the body is working closely with the World Health Organization (WHO) to raise global production of critical medical equipment. She said China is an important source of health supplies and is stepping up production.

She predicted that the global recovery will be staggered, much like the way the pandemic hit countries one after the other.

Global confirmed cases of the Covid-19 virus surpassed 550,000 on Friday, with more than 25,000 deaths, according to a Johns Hopkins University tally. Europe is the current epicenter of the pandemic, with countries including Italy, France, Spain, and the UK in national lockdown mode in a bid to contain the spread.

The WHO said this week that the US, which has more confirmed cases than any other individual country, has the potential to become the next epicenter.

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Bank of Canada cuts key rate to 0.25%

The Bank of Canada announced a large scale asset purchase program and cut its benchmark interest rate to a record low in a bid to ease financial-market strain and shield the nation’s economy from coronavirus fallout.

The central bank lowered its policy rate Friday by another half a percentage point to 0.25 per cent, adding in a statement that the unscheduled decision brings the benchmark as low as policy makers are willing to take it for now. It also announced for the first time it plans to start buying a minimum of $5 billion (US$3.5 billion) a week in government securities as well as short-term debt issued by companies.

The move was necessitated by quickly deteriorating conditions, including a flood of new jobless claims last week, that suggest the economy is poised to suffer one of the sharpest drops in economic activity in history. The energy-heavy Canadian economy is also having to contend with the crash in oil prices. At a press conference, Governor Stephen Poloz said the primary objective is to restore proper functioning in the financial system, which he said remains extremely strained, particularly for a commercial paper market that has “frozen.”

“The intent of our decision today is two-fold: to immediately support the financial system so it keeps on providing credit, and, over the longer term, to lay the foundation for the economy’s return to normalcy,” Poloz said in his opening statement.

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The Canadian dollar pared losses after the decision, and was trading 0.3 per cent down at $1.4068 per U.S. dollar at 11:32 a.m. in Toronto trading. It had fallen as much as 0.9 per cent earlier in the day.

Poloz also seemed reluctant to call the actions “quantitative easing,” even though he said he wouldn’t argue against characterizing the move as such. Quantitative easing is usually associated with trying to bring down rates further out in maturity, Poloz said. The Bank of Canada’s purchases will instead take place across the yield curve.

“When we’re adopting a true QE program we would announce it as such,” Poloz said, preferring instead to call it large-scale asset purchases.

Even still, the central bank’s intervention could be far reaching and seems to be open ended. Poloz said the central bank will buy securities until after a recovery starts, while adding the central bank has other tools available to continue injecting liquidity into markets and adding stimulus. In its rate statement, the Bank of Canada said it will take additional actions to support the economy if needed.

“We have said we will keep those purchases in place, we will continue to purchase until such time as the economic recovery is well underway,” Poloz said. “Those things can be done in very, very large amounts — literally unlimited if you like. In those tools we have as much room to maneuver as you would like.”

The Bank of Canada last cut rates to these levels in 2009, during the global financial crisis. The move today is also its largest foray into large scale asset purchases.

Friday’s actions by Poloz are part of a wave of policy rate cuts around the world and brings Canada’s benchmark rate closer to most other advanced industrialized economies.

The Bank of Canada has now lowered interest rates three times this month, with a cumulative easing of 1.5 percentage points. The Federal Reserve has also cut by 150 basis points this month.

Friday’s asset purchase announcements add to a slew of new liquidity measures to inject cash into the banking system and money markets and to ensure it can handle any market-wide stresses in the financial system.

Poloz said he’s not concerned the central bank is doing too much. “Some may suggest this is using a lot of firepower but I think a firefighter has never been criticized for using too much water,” the governor said.

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Cannabis home deliveries soar following social distancing measures

The coronavirus outbreak has set off an unexpected surge in California’s legal marijuana market

One company rushed to expand its delivery fleet. Another has seen sales triple. The global coronavirus pandemic has left millions of people locked out of bars, restaurants and theaters, but it’s been an unexpected boost for some U.S. pot shops.

Marijuana users in the nation’s largest legal pot shop, California, and elsewhere are on a buying binge, as they stock up for potential quarantines or simply light up in search of relief during anxious times and government lockdowns. New York, San Francisco and Palm Springs, California, are among the cities labeling dispensaries “essential” businesses that can remain open during virus lockdowns, in some cases with limitations.

Sales increases also are being witnessed in Colorado and Washington, according to cannabis data company Headset.

Dispensaries, meanwhile, have been quick to accommodate virus-wary customers, boosting delivery and pickup options.

In California, the online delivery marketplace Eaze said order volume jumped 38% on Monday, compared to the annual average, and deliveries overall saw an identical jump. Deliveries to first-time customers spiked over 50%.

The Weedmaps online directory has documented a big jump in delivery and pickup orders, too, and found California saw a 66% increase in order volume in the second week of March, compared to the first week.

Glass House Group CEO Kyle Kazan bought several Priuses to put more delivery vehicles on the road to keep up with demand.

With many consumers reluctant to go out for fear of getting sick, practicing social distancing or being ordered to stay inside by government, “we are going to have to bring the store to them,” said Kazan, whose company includes a cultivation arm and four California dispensaries.

“It’s not much different than Amazon,” Kazan said.

At The Herbery, which operates two stores in Vancouver, Washington, sales have spiked about 30% since last Friday, when Gov. Jay Inslee announced widespread school closures and other measures to deal with the outbreak. One store saw sales double on a single day, said owner Jim Mullen.

“People are buying four or five items instead of one or two,” he said. “People are asking what the legal limit is. We’re seeing bulk buying and people stocking up on products.”

In California, many stores have been forced to close their doors or limit sales over health fears, but marijuana shops have been deemed essential businesses in key markets across California where shelter-in-place orders have been issued, including in San Francisco.

Around the state it’s a case-by-case basis that is changing daily, but it appears much of the legal market is up and running, even as residents often find toilet paper, bread and other staples hard to find. Los Angeles, the state’s biggest market, on Thursday issued an order designating cannabis dispensaries “essential activities” because “they provide services that are recognized to be critical to the health … of the city,” even as it shuttered gyms.

Meanwhile, in New York, health officials notified medical marijuana dispensaries Tuesday that they are considered essential businesses and can stay open even if others are shuttered. On Friday, Gov. Andrew Cuomo confined nearly all residents and non-essential workers to their homes, starting Sunday, following California’s near-lockdown.

Dispensary operator Etain has seen more patients requesting 30-day supplies, instead of weekly, particularly before it became clear that dispensaries would stay open, chief operating officer Hillary Peckham said.

With a significant jump in home-delivery orders for next week, the family-owned company is adding delivery days. Meanwhile, it’s encouraging people who pick up their medications to make appointments so it can limit dispensary crowds.

The sustained marijuana sales in the midst of a virus outbreak mark a victory for California’s 27-month-old legal industry, which feared illicit shops would flood the gap if the legal market was abruptly shut down.

San Francisco briefly shuttered it pot shops at the start of a lockdown in the region, before allowing sales to resume.

“I’m very grateful that they’ve had it open, simply because I deal with anxiety and I know a lot of people that really depend on the medical marijuana,” said Jackie Cornelius, a customer shopping at The Green Cross dispensary.

Sales for the Oakland-based Ganja Goddess delivery service had witnessed a steady climb in sales earlier this month, but “at the end of last week it just exploded,” said CEO Zachary Pitts.

“Our sales have tripled,” he added. “It’s been insane levels of business.”

Pitts and other industry experts see a simple logic at work. Cannabis can be consumed safely at home — it doesn’t require a social setting, or a trip to a mall — so deliveries make sense.

Companies are not just seeing a boost in new revenue — they are working to keep their employees and customers safe, with such measures as providing hand sanitizer in a cash-heavy business and limiting the number of customers in shops.

Meanwhile, the state has been allowing dispensaries to apply for the right to provide curbside pickups — a sort of drive-thru pot shop previously banned in California.

In the midst of a health crisis, a curbside pickup “is so much more preventative,” said Los Angeles dispensary owner Jerred Kiloh, who closed his sales floor Wednesday after setting up a curbside sales operation, with walk-in pickups at his lobby window on busy Ventura Boulevard.

“Imagine completely changing your entire business structure in 24 hours,” said Kiloh, who heads the United Cannabis Business Association.

Kiloh has implemented a range of sanitation steps for his shop, from routinely cleaning surfaces in the lobby, where customers can pick up orders, to requiring employees who carry out curbside orders to wear medical gloves.

At the Vancouver, Washington, shops, the number of customers inside is being limited, so people sometimes have to wait outside for five or 10 minutes. “We’ve got Purell by the cash registers — we’re handling cash every day,” owner Mullen said.

The jump in income has been welcome for many long-struggling California businesses, which have been competing against a robust illicit market and shouldering hefty state and local taxes since broad legal sales kicked off in January 2018.

At The Apothecarium dispensary in San Francisco, store manager Cali Manzello said the threat of temporarily losing legal sales set off a buying splurge.

“People knew they needed something to get them through, not only the time of being maybe trapped at home for these few weeks, but just to feel good,” Manzello said.

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Want to buy gold coins or bars? Good luck finding any

Investors are snapping up gold bars and coins, seeking the security offered by the precious metal as the coronavirus pandemic trashes economies and forces central banks to print trillions of dollars in new money.

But with major gold refineries across Europe shut because of government-ordered lockdowns, online shops out of stock and many of the passenger planes that move bullion grounded, physical gold is becoming harder to track down.

“There is gold around, it’s just either in the wrong location or in the wrong form,” said Ross Norman, an independent analyst and former senior bullion dealer at Credit Suisse (CS). “Anyone looking to buy a physical bar or settle a futures contract has an issue.”

The strain on supply, due to a lack of transport and processing capacity, has been exacerbated by a surge in demand, as investors rush to buy the safe-haven asset amid the global economic and financial market turmoil.

Rob Halliday-Stein, managing director of BullionByPost, the United Kingdom’s largest online bullion trader, said sales of gold coins have increased five-fold. “It’s unprecedented,” he told CNN Business.

The company sells everything from Australian gold nugget coins starting at around £44 ($52) to South African Krugerrands for £1,530 ($1,800) and 1 kilogram gold bars for £48,273 ($56,853).

During uncertain times there’s often a flight to gold, because its physical properties make it a good store of value, said Jeffrey Currie, global head of commodities research at Goldman Sachs (GS). “It is dense, cheap to store and much easier to move around than a commodity like oil,” Currie explained.

As central banks print huge amounts of euros, pounds and greenbacks, collectively known as fiat currencies, to keep their economies afloat, the intrinsic value of money falls.

“We like to call [gold] the currency of last resort,” added Currie. “When fear sets in and policymakers debase the fiat currencies like they are now, the cost of holding gold relative to holding other currencies declines.”

BullionByPost anticipated the demand spike and secured extra stock in advance. But Halliday-Stein said investors should be wary of buying gold if it is not yet in the hands of the seller, noting that “supply chains are creaking” and it is difficult to predict when more stock will become available.

To add to the strain on supply, fewer people are selling gold back to dealers despite the spike in prices. And those who do want to sell are finding it difficult because restrictions on travel and work mean companies such as BullionByPost have pared back their operations, said Halliday-Stein.

Supply shortages

The crunch isn’t just affecting small investors. The international market is at risk of seizing up too.

While London, the global hub for the physical gold trade, has plenty of 400 ounce bars (worth over $420 billion) inside vaults beneath the city, getting those bars to New York in the form in which they are traded there (100 ounce bars) is proving a challenge, with precious metals refineries closed and thousands of passenger flights canceled.

Gold traders in the Big Apple are feeling the squeeze. At one point on Tuesday, the difference between the spot price of gold in London — that is, the price of gold for immediate delivery — and futures contracts trading in New York for delivery of gold in April increased to around $100, said Norman, the independent analyst.

Gold futures contracts enable buyers and sellers to agree in advance a price to be paid when the gold is delivered in future. Spot gold in London and gold futures in New York normally trade within $1 to $2 of one another, reflecting the costs associated with delivering the gold to New York.

The widening gap indicates that the market is unsure of whether it will be possible to actually deliver the physical gold in April and make good on the contracts. In other words, it is pricing in a supply shortage.

That prompted CME Group (CME), which owns COMEX, the exchange on which these contracts are traded, to announce Tuesday that it would launch a new gold futures contract for April, which allows for delivery in 100 ounce, 400 ounce and 1 kilogram gold bars.

“This new contract will provide customers with maximum flexibility in managing physical delivery,” a CME Group spokesperson said, highlighting “the unprecedented market conditions.”

The London Bullion Market Association, the body that sets standards for how precious metals are refined and traded around the world, said it has offered support to CME Group to “facilitate physical delivery in New York” and is working closely with COMEX “to ensure the efficient running of the global gold market.”

Gold stocks in London vaults are at a “healthy” 8,263 tonnes, the London Bullion Market Association said in a statement.

The difference between spot and futures prices was around $25 on Thursday, suggesting that the market is still struggling to function.

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