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"Thirteen items make up 75 percent of Korea's exports. It has been hesitating to diversify its export items. The government is planning to expand to other items such as consumption goods and cultural content, and K-sure will also focus on those," Kim said, according to The Korea Times.

He said that the state-run export credit agency will concentrate on helping small- and medium-sized companies with their exports. It plans to provide 46.5 trillion won ($38 billion) worth of trade insurance for the SMEs, which will increase the total trade insurance it offers this year to 196 trillion won ($160 billion) from last year's 168 trillion won ($138 billion).

The announcement comes amid increasing concern over faltering exports, which have been the sustaining pillar of the economy. The country's exports dipped 18.5 percent in January from the previous year, marking the biggest plunge since August 2009 when the country was hit by the global financial crisis. While there seems to be little solution, as the dip is due to decreasing global demand, the government has placed sustaining exports as its first priority.

In line with such efforts, K-sure allocated another 14.7 trillion won ($12 billion) to financially support the overseas projects of SMEs, helping them advance into new markets as well as nurturing new growth engines for exports such as services and consumption goods.

Kim pointed out that the government's diverse support programs are concentrated on a few champion firms. "That is incurring the moral hazard of firms. We will support firms that are shunned due to poor financial structure, but with good contents," he said.

It is also strengthening support for exporters advancing into new markets such as Iran and Cuba. Korean businesses are eying Iran after the lifting of sanctions. It signed a comprehensive MoU with Iran's Economy Ministry, and plans to extend financial support in Cuba. Credit guarantees for cultural content businesses will be expanded to increase exports of 'Hallyu', while 300 billion won ($245 million) will be allocated to ensure exporters of services.

It also announced plans to expand overseas investment insurance to cover collective investment vehicles such as overseas infra funds. It aims at helping Korean businesses seeking to participate in infrastructure development in emerging countries, following the launch of the Asia Infrastructure Investment Bank (AIIB).

Source:Irandaily

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The Russian oil company reenergized talks with Tehran in the summer 2015 on resuming oil cooperation in anticipation of Iran's return to the global market in 2016. Iran made a comeback after it had proved that its nuclear program complied with International Atomic Energy Agency regulations, Sputnik reported.

"We plan to import oil products to Iran first. As much as we can. We have a terminal in Astrakhan [on the Caspian Sea] with a capacity of two million tons," Nekrasov told journalists.

"We are currently holding talks on deliveries, and as soon as it's contracted, we'll deliver," he added

Source:Irandaily

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A company spokeswoman said GE is exploring potential business opportunities in Iran and the chief executive of its oil and gas division visited the country recently, Reuters reported on Monday.

The visit by Lorenzo Simonelli, CEO of GE Oil & Gas, comes at a time when Iran is aiming to boost its crude oil exports and recover the oil market share it had before sanctions over its nuclear program.

"In line with the easing of sanctions, we have begun looking at potential business opportunities in Iran, while fully complying with the rules laid out by the US government. Simonelli's visit is part of this effort," the unnamed spokeswoman said.

The reported said Iran could help GE lessen the effects of the fall in energy prices as a result of which the company doubled its 2016 budget for restructuring. Further, GE has said that it expects oil and gas revenue to fall a further 10-15 percent in 2016 because of weak oil prices.

Iran recently unveiled a new oil contract model along with some 50 crude oil and gas projects up for development with better incentives than the previous buy-back deal in order to attract foreign investors.

The new contract was developed following Iran’s nuclear accord with major world countries last summer.

On January 16, Iran and the five permanent members of the UN Security Council – the United States, Britain, France, Russia and China - plus Germany started to implement the nuclear agreement, the Joint Comprehensive Plan of Action (JCPOA), they had reached in July 2015.

After JCPOA went into effect, all nuclear-related sanctions imposed on Iran by the European Union, the United Nations Security Council and the United States were permanently lifted. Iran in return has put some limitations on its nuclear activities.

The recent lifting of the economic sanctions against Iran has already started a rush among international corporations to start to set their feet in the country’s vast consumer market of around 80 million.

Source:Irandaily

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“There are grounds for cooperation between the two countries in oil refinery, LNG, petrochemistry, investment and projects financing sectors,” Zangeneh said in a Monday meeting with Katsuyuki Kawai, an adviser to Japanese prime minister, who is in Tehran at the head of a delegation.

He added that the current visit by Kawai and his accompanying delegation to Tehran is aimed at reviewing issues of mutual interest and making preparation for the Japanese premier’s trip to Iran in 2016.

Following the removal of nuclear-related sanctions against Iran in January, Tehran and Tokyo can speed up cooperation, particularly in the oil sector, the minister emphasized.

Iran and the five permanent members of the UN Security Council – the United States, France, Britain, China and Russia – plus Germany started to implement the Joint Comprehensive Plan of Action (JCPOA) on January 16.

After the JCPOA went into effect, all nuclear-related sanctions imposed on Iran by the European Union, the UN Security Council and the US were lifted. Iran has, in return, put some limitations on its nuclear activities.

Zangeneh further added that the two countries can expand strategic relations in the energy sector and said the export of Iran’s crude oil to Japan can be among important fields for cooperation.

“We expect Japan and companies managed and overseen by the country’s government to boost Iran's oil purchase to at least pre-sanctions level,” he said.

On January 22, the Japanese cabinet approved the lifting of its sanctions against Iran, joining the ranks of the world's major economies to normalize trade ties with the Islamic Republic.

Japan was one of the key clients of Iran’s oil before the US-led sanctions were imposed on the Islamic Republic in 2012.  Iran also hosted several leading Japanese companies in its oil and gas projects before the sanctions were put into place to discourage purchases of oil from Iran not only by Japan but also by many other international clients.    

The prospects for the removal of the sanctions against Iran encouraged Japanese officials to look for avenues to return to the previous status of oil relations with Iran.

Source:Irandaily

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The major Asian crude importer bought 203,165 barrels per day (bpd) of Iranian crude oil last month against 64,699 bpd a year earlier, customs data on Monday showed, quoted by Reuters.

The imports were the highest since 2012 when South Korea bought 230,769 barrels from Iran before it cut shipments due to intensified Western sanctions.

South Korea bought 114,595 bpd of crude from Tehran last year, down eight percent year-on-year, according to Reuters.

Iran is currently exporting 1.3 million bpd of crude oil, which will reach 1.5 million bpd next month, Vice President Es’haq Jahangiri said on Saturday.

Since the implementation of a nuclear accord last month, the country has ramped up production by 400,000 bpd, Managing Director of the National Iranian Oil Company (NIOC) Rokneddin Javadi said in remarks published on Sunday.

Iran is seeking to boost output by 1 million barrels a day and regain market share of 2.1-2.3 million bpd before sanctions were intensified in 2012.

Javadi said Iran is planning three initial shipments to Europe carrying 4 million barrels of oil with 2 million barrels going to France’s Total and the rest to companies from Spain and Russia.

On Sunday, a tanker for Total was being loaded at Iran’s Kharg Port​ in the Persian Gulf, marking the first cargo of oil to Europe since sanctions ended, an Iranian Petroleum Ministry official said.

Tankers chartered for Chinese and Spanish companies were due to arrive later in the day, while a vessel chartered by Lukoil’s trading unit Litasco was located off the east coast of the UAE after loading at Kharg Island, Bloomberg reported.

Greece’s Hellenic Petroleum has also signed supply deals with the NIOC along with Total, Spanish refiner Compania Espanola de Petroleos and Russia’s Lukoil. They have all booked cargoes of Iranian crude to sail from Kharg Island to Europe.

On Sunday, Pirouz Mousavi, managing director of Iran Oil Terminals Co., told the Mehr news agency that the loading operation of the three tankers at Kharg terminals would be done within 48 hours.

According to Mehr News Agency, Asadollah Askaroladi said, "In recent months, Iran-China political and business interactions have led to a number of promising outcomes in the Iranian economy and $20 billion of Chinese finance will be opened in Iran."

He underlined that the new finance will become available to Iran over the coming years while Iran has always been able to receive twice the amount of its yuan deposits in China as finance.

The official further said that a Chinese delegation visited Iran last week and a 15-member Iranian trade group will travel to China on April 3.

"The addition of Chinese yuan to the basket of international currencies has had a positive impact on Iran," noted Askaroladi concluding, "Iran possesses a large amount of yuan in China and better finance conditions will arise by conducting transactions in the Chinese currency."

During a meeting with officials of Iran’s Energy Ministry as well as the Renewable Energy Organization in Tehran, senior executives from TOLGA expressed their eagerness for cooperation in Iran’s solar power generation industries, Tasnim News Agency reported on Tuesday.

In the meeting, the Iranian officials outlined the country’s investment process and capacities in the field of photovoltaic and renewable forms of energy.

TOLGA officials said that they are ready to invest in construction of photovoltaic power plants to generate electricity in Iran.

Both sides agreed to finalize the details of cooperation in another meeting in the near future.

Iran is the biggest producer of electricity in the Middle East, generating over 70,000 megawatt-hours. 

The meeting came after Tehran and the P5+1 (Russia, China, the US, Britain, France and Germany) on July 14, 2015 finalized a comprehensive deal on Tehran’s nuclear program and implemented it on January 16.

The nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions on Iran after coming into force.

Source:Irandaily

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Seoul joined other countries in lifting sanctions against Iran last month after the landmark nuclear accord reached in July 2015 went into effect, Yonhap reported.

"Government-wide assistance will be offered so businesses can gain access to the resource-rich country," Minister of Trade, Industry and Energy Joo Hyung-hwan said in a meeting with senior executives from Hyundai Motor Co., LG Electronics Inc., Daelim Industrial Co. and other companies planning to do business in Iran.

He said a ministerial-level meeting is planned for Feb. 29, with a high-ranking economic delegation to be sent to the country to open new business ties.

Local companies said that with the lifting of sanctions, Iran's economy could grow 5.8 percent in 2016 and 6.7 percent next year, while access to frozen funds totaling some $100 billion could spur fresh investment in energy infrastructure and social overhead capital projects. This translates into more business opportunities for South Korean companies.

"To promote trade and investment, Seoul is committed to maintaining the current Korean-won based settlement of accounts system while adding other forms of exchange using different foreign currencies," he said. "The euro and Japanese yen can be used in tandem with the won to settle accounts."

Joo also said that actions will be taken to set up a financial support system that can help South Korean companies win orders in Iran. He said a creating a tied loan arrangement is being examined which could foster closer financial cooperation.

The official said that the government will provide information about Iran that can make it easier for local companies to expand into the market.

To expand bilateral trade, South Korean companies should set up joint ventures and reach technical transfer deals in such areas as autos, petrochemicals and steel. Construction and plant building also has growth potential, he stressed.

"If headway is made, South Korean exports, including parts and components, will increase and benefit companies," he said.

The boost will be welcome news for Asia's fourth-largest economy whose exports nosedived 18.5 percent in January.

He added that local companies may also be able to make headway in such areas as consumer electronics and cosmetics.

Exporting 60,000 vehicles to Iran

Korea’s top automakers Hyundai Motor and Kia Motors aim to export 60,000 cars to Iran in 2016, an executive from Hyundai Motor Group said in the meeting.

"The group has increased its sales target by 240 percent from 25,000 cars sold in Iran last year," Hyundai Motor CEO Jeong Jin-hang was quoted as saying by The Korea Herald.

The company’s car exports came to a halt in 2012 after the international community imposed sanctions on the Middle Eastern country.

In addition, the Korean automotive group will expand its Complete Knock Down products for Iran. CKD refers to semi-knockdown products that are assembled in the local markets.

German BASF's $4b-investment

Meanwhile, managing director of National Petrochemical Company (NPC) announced on Friday that Germany's BASF company has expressed its readiness to make a $4 billion investment in Parsian Special Industrial Zone for development of petrochemical industries.

Marzieh Shahdaei also added that 60 percent of the project will be financed by the $4 billion investment by the German company while an Iranian company will provide the remaining 40 percent of the project, Shana reported.

The official went on to say that in the second phase of the project, the German BASF will increase its share of investment.

Two Chinese and German firms are ready to cooperate in construction of an exclusive jetty in the industrial zone, said Managing Director of Iranian Mines & Mining Industries Development & Renovation Organization Mehdi Karbasian.

According to IMIDRO chief, BASF operates six integrated petrochemical sites around the world and plans to establish the seventh site in Iran.

BASF is the largest chemical producer in the world and is headquartered in Ludwigshafen, Germany.

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Chief Executive Officer Ian Taylor said Vitol has already bought oil from the country which has been ramping up production since last month in a bid to claw back its global market share.

“We’ve bought some, yes we have,” he told Bloomberg Monday in an interview at the company’s London headquarters.

“We’ve bought a bit of everything really. Bit of products, bit of condensate. It’s very much business as normal,” Taylor added.

He said trade arrangements with Iran, either legally or logistically, are still a bit of an issue because of financing problems but not “specially” difficult.

“Obviously, we like everybody else, did some preparatory work. It was clear that it was coming.

“We also talked to them about what would happen once it did come. So, people are relatively ready,” he said.

Taylor, however admitted that getting insurance coverage for Iranian shipments are still difficult but possible.

“Organizing financial flows and insurance in shipping is not easy; I accept that it’s not easy, but it can be done.”

Iran’s immediate plan for return to the market is to pump 500,000 more barrels per day but Taylor said he thought it would take some time because of “some inevitable teething problems with things like banks and insurance.” 

The increase in output “obviously does add to the supply weight and probably will (do so) over time, but the market will deal with that, I think,” he added.

Taylor said he thought Iran’s production would increase by 450,000 bpd by the middle of the year and 600,000-700,000 bpd by the year-end.

“I think a lot depends whether the Iranians are able to get everything else that goes with coming back smoothly, I mean financing particularly. They obviously do look for cash and prepayments," he said.

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"I think a lot more will depend on whether all the money that has been owed flows back to get it reinvested to get some of these wells going again,” Taylor added.

Until now, the Fulcrum activity nowcasts have failed to identify a major turning point in global growth. This conclusion is still just about intact, but is subject to much greater doubt in this month’s report. There are some signs that growth in the advanced economies may be fraying at the edges, and China may be embarking on another mini downturn.

The growth rate in global activity remains broadly unchanged at around 2.8 percent, little different from the rates recorded since mid 2015. However, there has been a further slowdown in economic activity in the advanced economies (AEs), which are growing at only 1.2 percent, down from 1.6 percent late last year.

For the first time since 2012, the growth rate in the AEs is clearly below trend (estimated at 1.7 percent). Furthermore, the US nowcast is now at its lowest since the recovery began in 2009.

The nowcasts have warned of a noticeable slowdown in the US for many months, and they continue to suggest that American activity is expanding at only about 1.2 percent, little changed from the 2015 Q4 estimate.

Until now, however, this drag on global activity has been offset by fairly robust growth rates in the Eurozone. Worryingly, Eurozone growth has now sagged to about 1.3 percent. Although this remains above the US growth rate, it no longer provides a strong counterpoint to American weakness, according to the models.

This development reduces our confidence that the bout of American weakness in the industrial sector will be easily shrugged off by the global economy. Significant downgrades to consensus forecasts for US growth in 2016 now seem very likely. Although the risk of an outright recession still seems contained, the Fed must surely sit up and pay attention to this.

We judge that there has been little change in overall activity in the emerging markets this month. The China nowcast has moved down to the lower end of its recent range, but there are clear signs of stabilization in Brazil — by far the weakest of the G20 economies last year — and an up-tick in growth in India.

Full details of all the latest nowcasts are attached here. (Apologies for greater length than usual this month; there are a lot going on.)

The world ex Brazil may have slowed a fraction.

Olivier Blanchard wrote recently that the turbulence in asset prices could not be justified by any major change in economic fundamentals, but he warned that if market turbulence persisted, it could itself trigger an interruption in global growth rates. Central banks have generally agreed with this assessment, with many of them commenting that downside risks to growth rates have increased. This is an environment in which nowcasts can be particularly important in the early identification of changes in global activity.

global-growth-worldThe latest results suggest that global growth is still running at 2.8 percent, about 0.7 percent below trend.