This post belong to a series, that I advise you to read it. Part I, Part II, Part III, Part IV, as important is this one.
Virus post coming later tomorrow, not because of lack of news, but because of the sheer contradiction in the most pertinent papers. You will understand when you read it.
I also received quite a few emails and some comments as weeks went by on how glad and depressed/sad people were to find my Substack. The entire purpose, at face value, of this work is to prepare YOU, the reader, against the odds of events unfolding in short and long term. Below surface level, is attempting to make you think for yourself, and adopt a generalist framework, easier said than done.
I want the reader to be better prepared, more aware, and hedge against the odds to the best of their ability.
This was meant to be a shorter piece, with just mention of Taiwan and the activist/oil angle, yet one thing led to another…
Last night, out of nowhere…
Taiwan hit by widespread power outages
Two biggest cities and iPhone processor production hub affected
The following text in quotes belongs to the news article above?
The malfunction took place at Kaohsiung's Hsinta Power Plant, the biggest power plant in southern Taiwan, according to the company. The iPhone processor production hub is in Tainan, in southern Taiwan.
"Southern Taiwan will take more time to restore power," Wang said. "Restarting power plants takes some time, too."
The large-scale power outage comes as former U.S. Secretary of State Mike Pompeo is in Taiwan for his first-ever visit to the key Asia tech economy. Pompeo is set to meet Tsai on Thursday. Their meeting is expected to go ahead, but a live broadcast of the event has been cancelled.
Taiwan suffered its last massive power outage in 2021, which affected some 4 million households and was also caused by malfunctions at Hsinta Power Plant's power grids.
If you are the common person, or normal analyst, you will find 16 different excuses to interpret this event, besides the real reason. The Hybrid reason. Besides the obvious angle of being irritated with Mike Pompeo visit, China has been clearly testing the water.
Measuring not only the cascade effects on response and infrastructure, but sentiment, network, communications. This isn’t a coincidence, but a signal, I don’t expect China to invade Taiwan soon, but this is clearly a sign. In my personal opinion, the sooner, the better for them, but I would expect they want more assurance and need to set more pieces on the board to do it.
And since our theme is hybrid warfare.
Libya’s Biggest Oil Field Stops Producing as Crisis Deepens
Protesters threaten to keep key export terminal closed
Political standoff runs the risk of reigniting recent fighting
Production was halted at Libya’s biggest oil field and protesters threatened to keep a key export terminal closed, as the OPEC nation plunged deeper into political crisis.
The Sharara field, which produces 290,000 barrels a day, was closed Thursday after an unknown group shut down one of its main valves, according to people familiar with the situation. They asked not to be identified as they weren’t authorized to speak to the media.
Per my comment on Twitter. “In the age of hybrid war, you don't know what is a legitimate protest, activist action or just puppets being used.” , I raised this point a few times before. This isn’t by any measure a “novel” thought, Russians used green activists to kill fracking in the UK, it dates back years.
Iran wants euro payment for new and outstanding oil sales
Iran wants to recover tens of billions of dollars it is owed by India and other buyers of its oil in euros and is billing new crude sales in euros, too, looking to reduce its dependence on the U.S. dollar following last month’s sanctions relief.
The current US adminstration wants… something.
As I said quite a few times, this feels like a forced energy transition towards their Green future, whatever that may cost the entire planet and economies, since the elites are pretty much insulated.
Interesting fact, China bought 266,000 tons of Soy beans yesterday. Fertilizer prices are skyrocketing the last 2 days, and now with a boat sinked in the sea of Odessa, Ukraine, insurance companies won’t cover it, cargo will grind to a halt, nothing will go in and out, so the decision of not accepting ships, or even cargo from Russia in some ports is (beyond suicidal), pointless.
Wheat shortages to Ukraine biggest buyers (mostly in the Middle East), a complete suicidal move by the US and the EU, increasing the costs and stock of fertilizer to unknown heights and also unknown duration.
Meaning after mild starvation, and some localized famines start hitting severely unstable, and poor economies, civil unrest will start. At scale, fast, explosion of violence, and we have another Ukraine scenario, millions of refugees flooding Europe, causing further European strife, and societal fracture.
Ukraine war threatens to make bread a luxury in the Middle East
Ukraine and Russia are key Middle East wheat suppliers
From Yemen to Egypt, food-poor nations fear price surge
Millions more seen at risk of food poverty in the regio
Across the Middle East and North Africa, fallout on food prices from the war in Ukraine could drive millions more into "food poverty", said the WFP's senior regional spokesperson, Abeer Etefa.
The region is particularly vulnerable to rises in the cost of basic foods due to inadequate local production and high rates of poverty, with anger over food costs fuelling the "Arab Spring" protests in 2011.
Yemen, which is almost entirely dependent on food imports, buys at least 27% of its wheat from Ukraine and 8% from Russia, a senior financial official and a wheat importer said, asking not to be named.
Egyptian bakers were already feeling the sting of more expensive flour and cooking oil supplies. Russia and Ukraine are also major suppliers of sunflower oil.
This piece of news is merely to make the case for the deluge of refugees that will flood Europe in the coming years.
For all the new readers, this isn’t new, China has been telegraphing moves to fracture the entire global system for months, using 0 Covid to close ports, changing import/export rules, and more. My earlier posts were often shorter, to set up a foundation for the analysis here, and forecasting.
Decisions made by the NATO countries in the last 24 hours will set off secondary and tertiary order effects that will pale in comparison to the pandemic ones, and it is clear China was aware and prepared accordingly.
As a final note, weeks ago Alcoa, one of the biggest aluminum producers, warned that a would affect (the already short) supply of said material.
Alcoa expects higher aluminum prices, shorter alumina supply on Russia sanctions
The aluminum market will likely see elevated prices and tighter alumina supply as a result of ongoing international sanctions placed on Russia after its military invasion of Ukraine, an Alcoa executive said Feb. 28.
Oplinger said sanctions could also squeeze an already-short global alumina market if Russian aluminum producers shut down refineries or face challenges sourcing bauxite.
Beyond plans to restart capacity in Brazil, Oplinger said Alcoa has not committed any plans for further aluminum smelter restarts amid a bullish market that saw prices surge in 2021.
Today they announced this.
European Industry Faces Shrink or Shut Decisions on Energy Pain
Europe’s biggest industrial firms have been banking on spring to bring down soaring energy costs. Those hopes faded this week as Russian tanks rolled into Ukraine.
Smelters and chemical factories across Europe were already struggling before the invasion sparked another jump in gas and electricity prices. Now, a growing list of companies including Europe’s biggest chemicals maker BASF SE are warning the energy crisis will keep hacking away at their bottom lines for the foreseeable future.
“Energy prices will stay at a high level and they won’t go back to normal soon,” said Martin Brudermueller, BASF’s chief executive officer.
BASF already took an €800mn ($900mn) hit from rising gas prices in the fourth quarter, and the situation could worsen if the US and Europe broaden sanctions against Russia, which supplies more than 40% of the European Union’s natural gas.
“It would be very difficult to replace Russian gas with liquefied natural gas from elsewhere,” Brudermueller said.
BASF isn’t alone. The energy-intensive metals industry is also struggling. Aluminium Dunkerque Industries France, Europe’s largest aluminium smelter, had planned to ramp up curtailed production after the French government helped shoulder as much as 80% of the cost burden. But the renewed surge in prices following Russia’s invasion of Ukraine has put the plan on ice, a labour union official said.
Meanwhile, Germany’s Trimet Aluminium SE said manufacturing the metal isn’t economical at present energy prices. And building-materials giant HeidelbergCement AG on Thursday warned that profits are likely to suffer from rising energy costs over the coming months.
Aluminium Dunkerque had previously warned a conflict between Russia and Ukraine would impact (the already short) supply of said material. And here we are. Aluminum is one of the metals in higher demand for the green future, but it is very dirty. Aluminum can also feed inflation, and inside that same post, Trafigure saw the potential for aluminum stocks to disappear by 2024, I think it is safe to assume, given the current geopolitical moves, the energy crisis it will set off, and all its cascade effects, they might dissapear sooner.
If you asked yourself, yes, China did use 0 Covid to lockdown one of its biggest aluminum producer regions, it also turned off some of its smelters because of the price of coal, oil and electricity, which fed the shortages.
They also crippled the production of magnesium under decarbonization guise, and this shortage doens’t seem to end anytime soon after the last 5 days. Magnesium is critical to the production of many metals, among a long list of other products.
You can find here and specially in my Twitter page me referring how no shortage would get better in 2022. A timeless tweet.
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And a deep hidden venting, wish I had a data viz tool, an automated Obsidian where I insert terms and find 30 sources of that term, all connect. Like Palantir Graph tool.
Beyond Mathematical Odds V - Second and third order effects.
happy times!
That tweet aged like fine wine!
Although I have to agree with other readers. Your substack is like a spoon of depression but I prefer to be prepared than surprised :)