Copper has been on a wild ride this year. It started the year priced at $3.89 per pound before surging over 33% to reach a record high of $5.20 per pound. Since then, the price has fallen back 13% to $4.51, but still remains significantly
https://seekingalpha.com/article/4725289-taseko-mines-buy-stock-copper-demand-new-florence-mine
By Pratima Desai
London (Reuters) - The uptrend in demand for metals such as copper used in electric vehicles is intact despite doubts raised by the slowdown in EV sales, but estimating numbers is difficult as the market is evolving, commodity trader IXM's head of refined metal said.
Sales of electric vehicles have slowed for reasons including a lack of charging infrastructure and concerns about resale values.
"The electric vehicle industry is new. There are a lot of variables including penetration rates and battery chemistries which makes forecasting demand a guessing game," Tom Mackay said.
"Growth in electric vehicle sales is slowing, but sales are still increasing. It varies from region to region, but overall growth is strong and the demand story for metals is healthy."
According to consultancy Rho Motion, sales of battery EVs and plug-in hybrid EVs rose 32% last year to 13.63 million units, while in the first and second quarters of this year sales were down 25% and up 22% respectively from the previous quarters.
Copper is used in electric vehicle wiring. It is also used in the batteries, which typically contain lithium and depending on the chemistry nickel and cobalt.
"There have been some impressive technological advances in LFP (lithium ion phosphate) chemistry. Some LFP batteries can go for 1,000 kilometres and some can charge up to 80% in 10 minutes," said Mackay, who manages the copper cathode, zinc, lead nickel, cobalt and lithium books at the Swiss-based trader.
LFP batteries were developed for the Chinese market to provide a cheaper alternative to nickel cobalt manganese (NCM). But earlier LFP batteries could not be used for long distances.
"People still believe Western world battery demand will still be predominantly NCM, if only because of the higher value of recycling NCM batteries," Mackay said.
"Recyclability is a very important factor for automakers when deciding what chemistries to use."
Mackay added that the number of people working at IXM globally is lower than before, around 440.
"Focus has been on the quality of people. We exited the aluminium business because it wasn't providing the return we require from the resources."
(Reporting by Pratima Desai; editing by Emelia Sithole-Matarise)
Crude oil prices have reversed some of the gains they made on Monday as traders returned their attention to Chinese demand concerns.
Earlier in the day, oil held on to the gains that saw Brent crude breach $80 per barrel for the first time in months. The benchmarks had booked five straight days of gains amid rising tensions between Israel and Iran.
However, the war premium seems to be fading fast, once again, probably because traders are unwilling to wait for more than a day for Israel’s reaction to Iran’s missile attack last week. The more time passes between attack and retaliation, the weaker oil benchmarks will get, as suggested by Middle Eastern events from earlier in the year.
So, in the absence of anxiety about the Middle East, oil market players are once again turning their attention to the default factor directing prices these days: Chinese demand.
Per a Bloomberg report from earlier in the day, traders had expected more stimulus measures to be announced by the Chinese government at a much-awaited briefing by Beijing’s economic planner. Those expectations were apparently present despite a recent announcement of stimulus measures by the Chinese government.
“Crude is not getting the love from China that Chinese equities are,” Vishnu Varathan, head of Asia economics and strategy for Mizuho Bank, told Bloomberg. “Perhaps because the path of least resistance for the liquidity deluge is to the equity markets”
Some believe, however, that the price retreat today is a result of a reconsideration of the risk for oil supply disruption in the Middle East. “The geopolitical tensions in the Middle East rock on, but there has been some paring of exposure lately on some expectations that any disruptions to energy supplies may be more measured,” IG marketing strategist Yeap Jun Rong told Reuters.
Indeed, some observers have argued that it would be counterproductive for Israel to disrupt oil supply in the region—and the world—especially ahead of the U.S. elections. This has suggested a moderate rather than severe response to Iran.
By Irina Slav for Oilprice.com
https://oilprice.com/Latest-Energy-News/World-News/Oil-Prices-Drop-as-War-Premium-Fades.html
(Alliance News) - Central Asia Metals PLC on Wednesday said copper, zinc and lead production has fallen in the nine months to date, due to challenges posed by a new mining system at Sasa.
The London-based owner of Kounrad SX-EW copper project in central Kazakhstan and Sasa zinc-lead mine in North Macedonia said Sasa is now expected to achieve output towards the lower end of 2024 guidance, which currently stands at zinc-in-concentrate production between 19,000 and 21,000 tonnes, and lead-in-concentrate between 27,000 and 29,000 tonnes.
Kounrad is on track to achieve its full-year guidance for copper production, which stands between 13,000 and 14,000 tonnes.
Overall copper production for the first nine months of 2024 has fallen 1.2% to 10,248 tonnes from 10,377 tonnes for the same nine-month period in 2023. Zinc production was down 7.4% to 13,782 tonnes from 14,891 tonnes, and lead production fell 5.0% to 19,736 tonnes from 20,773 tonnes.
Chief Executive Officer Gavin Ferrar said: "Kounrad continued to perform well in the third quarter of 2024, in line with its production performance in the corresponding period of last year, and maintained its excellent safety record. The third quarter is seasonally Kounrad's strongest quarter, and the operation remains on track to achieve full-year production firmly within the guidance range given at the start of this year.
"Sasa also performed well in the third quarter of 2024, with the tonnage processed recovering from the levels of the first half 2024 towards the level recorded in the third quarter last year. This represents a great achievement by the Sasa team, given the challenges posed by the transition to the new mining system designed to ensure the operation's long-term future. Head grades, in particular zinc, also recovered relative to the first half of 2024. We look forward to maintaining this progress in the fourth quarter, which we expect to result in full-year production towards the lower end of the guidance range.
"Meanwhile, the capital projects programme at Sasa is nearing completion, which includes moving to the use of paste backfill in mining and adopting dry-stack tailings. Together, these technologies form the core of Sasa's long-term strategy; maximising resource extraction, and extending the life of Sasa tailings storage facility 4 and thus avoiding the need for a new conventional tailings storage facility. Together, these developments ensure Sasa's planned life to at least 2039."
Shares in Central Asia Metals were down 0.2% at 190.30 pence each in London on Wednesday morning.
By Emily Parsons, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Metals Acquisition Limited (MAC), which is dual listed on the ASX and the New York Stock Exchange, has raised $150 million as it eyes future mergers and acquisitions.
The company said it attracted support from new and existing shareholders from both Australia and overseas, with 8.33 million new CHESS Depositary Interests issued at $18.00 per new CDI.
This represents a 13 per cent discount from MAC’s closing share price of $20.70 per CDI on Tuesday.
CDIs give ASX investors the same beneficial interests in internationally listed companies as holding these shares on a foreign exchange.
Metals Acquisition will use the funds to retire a mezzanine debt facility and optimise its balance sheet following the acquisition of the CSA copper mine from Glencore in 2023.
The company said it is also on the lookout for inorganic growth opportunities to build its footprint.
MAC launched the capital raise on Tuesday as it looked to raise $140 million, with the completed placement exceeding this number.
MAC chief executive officer Mick McMullen explained the inspiration behind the placement.
“Following the acquisition of CSA in mid-2023 and listing on the ASX in early 2024, MAC has placed greater focus on optimising its balance sheet and determining an appropriate capital structure more reflective of the strong asset quality and the markedly improved credit proposition that MAC today represents compared to mid-2023,” he said.
“Feedback from investors has been strong that moving to a more typical long-term capital structure is desired.”
McMullen said it was in the best interests of the company and its shareholders to retire the mezzanine debt facility by paying back the debts. The placement has enabled MAC to reduce its net debt position from $US455 million following the acquisition of the CSA mine to about $US134 million upon completion of the raise.
The CSA mine delivered 10,159 tonnes of copper at an average grade of 4 per cent copper in the September quarter of 2024. MAC said C1 cash costs were expected to be in the $US1.90–2 per pound range.
“We remain on track to deliver around the mid-point of our full-year 2024 copper production guidance of between 38,000-43,000 tonnes and will provide a more fulsome update on the status of operations as part of our quarterly report later this month,” McMullen said.
https://www.australianresourcesandinvestment.com.au/2024/10/10/nsw-copper-miner-raises-150-million/
October 4, 2024
Tribes in the upper Colorado River basin are still struggling to get compensated for water to which they are entitled but aren’t using.
Tribes had hoped to be included in a new round of federal funding through the U.S. Bureau of Reclamation aimed at conservation programs in the Upper Basin and possibly get paid for their water that they aren’t using. But it appears that will not be the case, Lorelei Cloud, vice chair of the Southern Ute Indian Tribe, said on Sept. 20.
“Reclamation agreed to include tribal forbearance programs under the B2W program where we were looking forward to announcing and working on a proposal,” Cloud said. “On Sept. 18, the state of Colorado informed the Southern Ute Indian Tribe that Reclamation has reconsidered its position and will no longer include tribal programs in the B2W program. This decision needs to be reversed.”
The comments came during a panel discussion at the Colorado River Water Conservation District’s annual seminar in Grand Junction. Cloud put out a call to action for attendees to help them plead their case to federal officials. She noted that the title of the panel was “Does History Repeat Itself?”
“We haven’t changed anything,” she said. “No matter how tribes are trying, we haven’t changed anything.”
Becky Mitchell, Colorado’s representative to the Upper Colorado River Commission and the state’s lead negotiator on Colorado River issues, has advocated for more tribal inclusion. She said Colorado officials were notified by phone that Reclamation would not fund forbearance with B2W money.
“Both the tribes and the states thought that this was an option for the use of that funding,” Mitchell said. “There are commitments that have been made, not just in this last year, but in the last 200 years, and it’s time to make good. … We’re going to continue to work with the tribes to pursue federal funding in an effort to correct these historic injustices.”
The Middle East is currently engulfed in a state of uncertainty regarding the next steps following Iran’s launch of nearly 200 ballistic missiles directly from its territory towards Israel on the evening of October 1, 2024. This action was in retaliation for the assassinations of Hamas’s political bureau chief, Ismail Haniyeh, in Tehran on July 31, and the Secretary-General of Hezbollah, Hassan Nasrallah, along with the Deputy Commander of the Iranian Revolutionary Guard, Abbas Nehrujan, in Beirut on September 27.
A Climate of Anticipation
Just as Israel responded to the initial direct Iranian attack in April, Tel Aviv pledged at the beginning of October to retaliate for what it deemed the “largest missile attack” in Israel’s history. Notably, the United States has shown a strong commitment to responding, with American officials emphasizing the necessity of consequences for the Iranian missile assault. Jake Sullivan, the U.S. National Security Advisor, even refrained from urging Israel to “exercise restraint,” signaling that Washington might be prepared for the first time to risk direct support for a new Israeli offensive against Iranian territory. This marks a significant and unprecedented shift in U.S. policy, particularly within Democratic administrations, regarding the tools used to respond to Tehran. Historically, Democrats have aimed to de-escalate tensions between Israel and Iran.
As the Middle East braces for these developments, numerous indicators suggest that an Israeli response could trigger a qualitatively different phase of direct conflict with Iran. If Tel Aviv follows through on its threats to bomb Iranian infrastructure or vital facilities, such as oil and gas storage sites, there is a real possibility of targeting nuclear reactors in Bushehr, Natanz, and Fordow. This situation suggests that the region may be on the brink of a prolonged war of attrition, especially given Iranian forces’ pledges to target U.S. and Western interests in Yemen, Iraq, and Syria. Thus, the pressing questions remain: What scenarios could unfold in the Middle East in the coming days? Is there any room for diplomacy amid Iranian missiles and Israeli fighter jets?
Possible Scenarios
One of the most complex factors surrounding the calculations of Middle Eastern countries is the “political and military euphoria” of both sides in the conflict. Following the assassination of Hassan Nasrallah and Israel’s military successes since the “Beiger” bombings on September 17, Israel’s confidence—particularly among its intelligence and military agencies—has surged. Prime Minister Benjamin Netanyahu expressed hopes of achieving a historical victory by “silencing opponents” on multiple fronts, including Iran, Iraq, Syria, Hezbollah in Lebanon, the Houthis in Yemen, and Hamas.
Conversely, Iran’s response on October 1, utilizing a large number of ballistic missiles that reached Israeli airspace in just 12 minutes, marked a unique “field euphoria” for Tehran’s forces. This was particularly significant after many believed Iran had abandoned its regional allies due to delays in avenging Haniyeh’s assassination.
In this volatile military environment, characterized by a lack of common ground among the warring parties and the absence of a regional or international entity willing to exert pressure to prevent a slide into political and military chaos, the region stands on the verge of several key scenarios:
Bilateral War Erupts: This scenario posits that significant and widespread attacks would be confined to Iran and Israel only. The nature of the Israeli response to the Iranian missile attack would dictate this. If Tel Aviv carries out its threats of a “hybrid attack,” combining security and military responses by conducting massive sabotage operations alongside strikes on any oil and gas wells, missile launch pads, or Iranian nuclear facilities, Tehran would have no choice but to escalate and launch successive waves of missile strikes against Israel without pause. Under these conditions, the region could experience a war akin to the Iraq-Iran conflict from 1980 to 1988. Both Israel and Iran possess the necessary tools to propel themselves into this scenario. Tehran boasts the largest missile arsenal in the region, with over 17,000 “Sejil” missiles capable of hitting targets 2,500 kilometers away, along with “Khaybar” missiles that reach about 2,000 kilometers. Additionally, Iran has long-range missiles such as “Fateh” and “Imad,” according to the Arms Control Association, a Washington, D.C.-based NGO, which noted that Iran possesses highly accurate solid-fuel missiles capable of reaching distant targets. All this indicates that Iran could enter into a long war with Israel, which has over 600 modern fighter jets like the F-15, F-16, and F-35, all capable of reaching Iranian territory. This scenario may only cease if either side realizes it is fatigued or faces an existential threat, such as the downfall of the Iranian regime or significant Israeli casualties due to ongoing Iranian missile attacks.
Outbreak of a Comprehensive Regional War: This scenario could occur if the United States directly partners with Israel in targeting Iranian territory. In such a case, we would be looking at the emergence of “regional warfare,” creating two opposing alliances: one led by the United States, Israel, and Britain—who have announced their involvement in countering Iranian missiles—and the other composed of Iran and its proxies, particularly the Houthis in Yemen, Hezbollah in Lebanon, and the Popular Mobilization Forces in Iraq. Should war break out according to this scenario, it would likely target American and Western interests not only in the region but also potentially Israeli and Western embassies elsewhere around the world. The recent bombings near the Israeli embassy in Copenhagen in early October serve as an indicator of what could transpire in the event of a comprehensive regional war.
Threat to the Iranian Regime: This scenario suggests that Washington and Tel Aviv might exploit the Iranian missile attack to target leaders of the Iranian regime, similar to the killings of Haniyeh and Nasrallah, while simultaneously bombing vital facilities. This action could encourage Iranians to rebel against their ruling regime from the American and Israeli perspectives. Despite previous failures by Washington to employ this option to topple the Iranian regime, Netanyahu’s direct address to the Iranian people from the United Nations, coupled with the U.S.’s tougher rhetoric following recent Israeli successes and the Iranian assault on Israel, suggests that this scenario cannot be entirely ruled out. Israeli officials have confirmed that key Iranian economic targets are part of Israel’s response, and Netanyahu and the Israeli military have indicated multiple times that their message to the Tehran regime will mirror their actions against Nasrallah.
April 2024 Scenario: In April, Israel retaliated against Iran’s launch of over 330 drones, cruise missiles, and ballistic missiles with a calculated attack near the Bushehr nuclear power station without hitting it, resulting in no Iranian response at that time. However, this scenario is somewhat unlikely under current circumstances for several reasons. First, Iran used approximately 200 ballistic missiles in its October 1 attack, double the number used in April’s assault. Second, the U.S. position is more rigid this time regarding Iran, encouraging Tel Aviv to retaliate; American calculations assume that allowing Tehran to go unanswered may embolden it and its allies to target American interests and forces in the region.
Focus on Lebanon: This scenario assumes that Israel’s response to Iran will be limited, with a return to focusing on southern Lebanon, aiming to bring back approximately 100,000 Israelis who have evacuated their homes since October 8, 2023, and to establish a buffer zone in southern Lebanon to ensure that events similar to those on October 7 do not recur from the north. This can be achieved by weakening Hezbollah’s capabilities. Israel may pursue this goal through one or more phases, beginning with a broad ground war aimed at expelling Hezbollah’s “Radwan Forces” from southern Lebanon. This scenario may take one of the following paths:
Demarcation of Land Borders: This would depend on Israel’s willingness to demarcate land borders with Lebanon, whether before or after a ground incursion, similar to the maritime border demarcation in 2022. This would resolve disputes over 13 land points that have lingered since the Israeli withdrawal from southern Lebanon in May 2000. Under this path, Hezbollah would retreat to the north of the Litani River, with the Lebanese Army replacing it on the border with Israel.
Hochstein Path: This involves the path that U.S. envoy Amos Hochstein attempted, persuading Hezbollah to withdraw eight kilometers north of the Blue Line, thereby reassuring Israel that Hezbollah elements would not infiltrate to abduct Israeli civilians, as occurred on October 7, 2023. It appears that Tel Aviv is seeking more than this in light of the intelligence and military successes it has achieved since September 17.
Buffer Zone to the Litani River: Given Iran and Hezbollah’s rejection of separating the fronts in Lebanon and Gaza, indicators suggest that the Israeli military will continue to act on its threats to push Hezbollah forces back approximately 30 kilometers. This buffer zone would extend from the eastern Bekaa Valley to the mouth of the Litani River in the Mediterranean Sea. This path would require Israel to engage in a potentially protracted ground war with Hezbollah forces, similar to the year-long conflict with Hamas in the Gaza Strip.
In conclusion, the Middle East stands on a precarious precipice, awaiting clarity on the extent of Israel’s response to the Iranian missile attack, a reaction that will delineate a new phase not only for regional security but also potentially lead to profound ramifications for issues and matters beyond the region.
https://www.politics-dz.com/five-scenarios-for-military-escalation-between-israel-and-iran/
Slovakian left-wing nationalist Prime Minister Robert Fico has reiterated his claim that Ukraine will not become a member of NATO as long as he is the leader of Slovakia.
“Ukraine’s accession to NATO would be a good basis for a third world war,” Fico said in an interview on Sunday, October 6th, one day before his visit to Ukraine.
The conservative government of Hungary along with Fico’s cabinet—which came to power a year ago— have been the only governments in the EU who have refused to send weapons to Ukraine, and have criticised EU sanctions against Russia for harming Europe’s economy.
The two countries have been in a bitter dispute with Ukraine following Kyiv’s decision to halt Russian company Lukoil’s pipeline oil exports through the territory of Ukraine, and into Hungary and Slovakia, endangering the two countries’ energy security.
Echoing Hungarian Prime Minister Viktor Orbán’s words, Robert Fico has said that the EU must strive for peace, instead of fanning the flames of the Russian-Ukrainian war.
“There is a military conflict in a neighbouring country where Slavs are killing each other, and Europe is significantly supporting this killing, which I just don’t understand,” he said on Sunday.
Comments like these, and Fico’s desire to pursue a sovereign foreign policy, have drawn the ire of the European liberal elites who are intent on punishing his government and withholding EU funds under a ‘rule of law’ pretext.
Fico—who survived an assassination attempt by a pro-Ukrainian protester in May—has previously said that the war cannot be solved militarily: Russia would never give back Crimea, the Ukrainian peninsula it annexed in 2014, and its troops would never leave the eastern Ukraine territories it invaded. While Europe has to prepare for a Russian military victory, NATO cannot get involved as it would provoke a new world war, he said earlier this year.
While many NATO member states have welcomed the idea of Ukraine joining NATO, and the joint statement made at the military alliance’s summit in July declares that Ukraine is on an “irreversible” path to membership, in practice, all NATO members would have to agree to accept Ukraine. The country would only be able to join the alliance once its war with Russia is over.
Nevertheless, on his first visit to Ukraine a few days ago, new NATO chief Mark Rutte insisted that “Ukraine is closer to NATO than ever before.”
While the Slovakian PM believes Ukraine joining NATO would be a provocation in the eyes of Moscow, Fico has no problem with Ukraine wanting to join the EU. “We support your path to the EU 100%. Your membership will be important and valuable for us,” he told his Ukrainian counterpart Denys Shmyhal at their meeting near the western Ukrainian city of Uzhhorod on Monday.
https://europeanconservative.com/articles/news/fico-warns-against-ukrainian-nato-membership/
During the European Council meeting on October 17-18, recent developments in relations with Ukraine will be discussed. The EU intends to stand by Kyiv for as long as necessary, according to European Commission (EC) Vice President Maroš Šefčovič during the EU Council meeting.
Šefčovič emphasized the importance of reaching an agreement on the proposal to allocate macro-financial assistance to Ukraine amounting to up to 35 billion euros as soon as possible.
"The funds must be allocated by the end of this year to provide Ukraine with the necessary fiscal space," he said, recalling the promise made by the G7 in June.
The Vice President of the European Commission also noted the efforts being made to prepare Ukraine for the upcoming winter.
"Together with our partners, we are repairing, reconnecting, and stabilizing Ukraine's energy supply," Šefčovič said.
As part of the winter plan for Ukraine, 160 million euros have already been allocated, supplementing the previously provided 2 billion euros for the country's energy security.
He added that the EU's goal remains unchanged: "to put Ukraine in a position to negotiate peace on favorable terms and to help it on its path to full membership in the European Union."
Assistance to Ukraine bypassing Hungary
Hungary has been blocking the financing of military assistance to Ukraine amounting to 6.5 billion euros from the European Peace Facility for several months. This is related to Budapest's concerns that the funds contributed to the facility would be directed to support Ukraine.
Recently, Hungarian Foreign Minister Péter Szijjártó said that Budapest will continue to block the decision to allocate 6.5 billion euros until Ukraine restores the transit of Russian oil from Lukoil.
https://newsukraine.rbc.ua/news/eu-seeks-to-set-ukraine-up-for-successful-1728381309.html
The world's largest oil exporter Saudi Arabia says that it is staying neutral and on the sidelines when it comes to the ratcheting wars in Lebanon, Gaza, and Yemen - and the Iran vs. Israel showdown.
Other members of the Gulf Cooperation Council (GCC) - which includes Qatar, the United Arab Emirates, Bahrain, Oman, and Kuwait - have also this week "sought to reassure Iran of their neutrality" in the Iran-Israel conflict, Reuters has reported.
Saudi Arabian Foreign Minister Faisal bin Farhan Al-Saud (R) and Iranian President Masoud Pezeshkian (L) meet at Asia Cooperation Dialogue (ACD) in Doha, Qatar on October 3, 2024. Iranian Presidency/Anadolu Agency
Prior to the Gaza war, Saudi Arabia was widely seen as on the cusp of signing a full normalization and diplomatic relations deal with Israel, as part of the Abraham Accords - but that was derailed in the wake of Oct.7.
At the same time, Riyadh and Tehran have recently made peace. The kingdom is now seeking to assure Iran it will not join Israel's side.
The Saudis and other GGC states wish to avoid the kind of attacks which could impact its oil production and exports, such as the 2019 Abqaiq–Khurais Saudi Aramco drones strikes. The US blamed Iran for those historic attacks, but Tehran leaders never owned up to it.
Iranian President Masoud Pezeshkian has been in Doha this week. He told Saudi Foreign Minister Faisal bin Farhan on Thursday, "We consider Islamic countries, including Saudi Arabia, as our brothers, and we emphasize the importance of setting aside differences to enhance cooperation."
Bin Farhan also expressed the desire to set aside all rifts. "We aim to permanently close the chapter on our differences and focus on resolving issues, developing relations as two friendly and brotherly countries," he said, as cited in Iranian state media.
Regional tensions are soaring, and global oil markets have been reacting with each big headline and statement related to reports that Israel could be preparing major strikes on Iran's oil and gas fields.
As for the latest Friday afternoon, which sent oil sliding...
President Biden asked Friday for clarification on his Thursday’s comment about potential Israeli strikes on Iranian oil facilities: “I think if I were in their shoes, I’d be thinking about other alternatives than striking oil fields.”#OOTT — Javier Blas (@JavierBlas) October 4, 2024
More broadly, things between the Gulf states and Iran began cooling in the wake of the decade-long proxy war in Syria to oust Assad. The GCC countries were active in funding jihadist rebels seeking to conquer Damascus (and to counter the Iranian/Shia axis), but once it became clear that the Syrian government emerged victorious, GCC diplomats began racing back to Damascus.
By Zerohedge.com
https://oilprice.com/Geopolitics/Middle-East/Saudis-Declare-Neutrality-On-Iran-Israel-Conflict.html
Saudi Arabia has raised its official selling price for Arab Light crude to Asia by 90 cents per barrel amid rising market volatility and geopolitical tensions in the Middle East. This move, surpassing market expectations, comes as oil prices surge in response to escalating regional conflicts.
Saudi Aramco Raises Arab Light Crude Price for Asia, Lowers Costs for U.S. and Europe Amid Tensions
Saudi Arabia increased its primary oil prices for Asian consumers in response to the increased volatility in the crude market, as traders closely monitor the progress of the Middle East conflict.
According to a price list obtained by Bloomberg, Saudi Aramco, the state producer, has raised the official selling price of its primary Arab Light crude grade by 90 cents, resulting in a premium of $2.20 per barrel over the regional benchmark for purchasers in Asia. According to a survey of merchants and refiners, the company anticipated increasing the premium by 65 cents per barrel.
Simultaneously, Aramco reduced the cost of all grades in the United States and Europe.
Oil prices have surged since the beginning of October as Iran responded to the devastating assaults in Lebanon that nearly eliminated the Hezbollah leadership by launching missile strikes on Israel. This week, benchmark Brent crude increased by over 8% in response to the strikes and anticipation of a potential Israeli reprisal, trading at approximately $78 per barrel.
OPEC+ Suspends Output Increase Amid Concerns Over China’s Sluggish Oil Demand and Market Surplus
Currently, the markets have largely ignored most of the regional risks this year, as the conflict has not resulted in a reduction in supply, and traders have instead concentrated on exacerbating concerns regarding sluggish demand. Last month, the OPEC+ alliance, which Saudi Arabia and Russia lead, suspended a planned output increase for two months, until the beginning of December, in response to concerns that China's slow oil consumption will result in an excess of crude in the market.
Group members who made voluntary output adjustments will not implement the previous plan to begin rolling back the reductions in October and November. Due to the delay in the resumption of hydrocarbon production, Saudi Arabia may continue to export less than 6 million barrels per day, as it has for the past four months.
- US Adds 254,000 jobs in August
- Hourly earnings increase by 4%
- Unemployment rate drops to 4.1%
Key Events:
FOMC Minutes Meeting (Wednesday)
Crude Oil Inventories (Wednesday)
US CPI core, y/y, m/m (Thursday)
US Economic Indicators
Friday’s labor market data reinforced a strong economic outlook:
- Pushing the US Dollar Index above 102 and boosting stock markets to their record highs
- Reducing expectations of a large rate cut to 25 bps
- Enhancing expected oil demand alongside improving labor market conditions
This week, FOMC meeting minutes and US CPI data are likely to add volatility to the market, especially with their influence on rate cut expectations. As labor market concerns ease, these events will play a key role in determining oil price trends from a monetary policy perspective.
Middle East Tensions
On the supply side, escalating tensions in the Middle East have shifted away from ceasefire hopes, adding upward pressure on oil prices due to potential supply disruptions. As threats of strikes on oil facilities increase, oil retested the $75/barrel zone last Friday.
--- Written by Razan Hilal, CMT – on X: @Rh_waves
By Tsvetana Paraskova - Oct 04, 2024, 4:32 AM CDT
International crude oil prices could surge by $20 per barrel if Iran’s oil supply drops in a possible escalation of the Middle East conflict, Goldman Sachs says.
“If you were to see a sustained 1 million barrels per day drop in Iranian production, then you would see a peak boost to oil prices next year of around $20 per barrel,” Daan Struyven, co-head of global commodities research at Goldman Sachs, told CNBC’s “Squawk Box Asia” on Friday.
However, this projection is based on the assumption that the OPEC+ group would not respond to a potential disruption to supply from Iran by boosting production, Goldman’s Struyven noted.
If major OPEC+ producers with enough spare production capacity, such as Saudi Arabia and the United Arab Emirates (UAE), increase output and offset some of the potential losses from Iran, oil prices could rise more modestly, and the impact could be slightly less than $10 barrel, Goldman’s analyst added.
Most analysts say that the OPEC spare capacity, concentrated in Saudi Arabia and the UAE, would be enough to compensate for an Iranian loss of supply.
“In theory, if we lost all Iranian production - which is not our base case - OPEC+ has enough spare capacity to make up for the shock,” Amrita Sen, co-founder of Energy Aspects, told Reuters this week.
According to analysts, Saudi Arabia could be able to increase its oil production by about 3 million bpd and the UAE by 1.4 million bpd.
Iran currently produces around 3.5 million bpd, of which an estimated 1 million bpd are exported, mostly in China, which hasn’t stopped buying Iranian oil after the U.S. re-imposed sanctions on Tehran’s oil industry.
An even more significant disruption to supply from the Middle East could lead to triple-digit oil prices. But analysts currently believe attacks on oil infrastructure in other producers in the region or the closure of the Strait of Hormuz are low-probability events.
Early on Friday in European trade, Brent and WTI prices were up by about 1% as the markets expected the Israeli response to Iran’s missile attack on Israel earlier this week. Oil prices were on track for a strong weekly gain amid the escalation of the conflict.
By Tsvetana Paraskova for Oilprice.com
https://oilprice.com/Energy/Energy-General/Goldman-Sachs-Sees-20-Upside-to-Oil-Prices-on-Iran-Supply-Shock.html
Oil bets are most bullish in two years as Mideast tension flares
BYALEX LONGLEY, DAVID MARINO AND BLOOMBERG
October 6, 2024 at 11:06 PM GMT+1
Last week, traders snapped up December calls on Brent crude to bet on oil reaching $100 or higher.
Oil futures posted their largest gain in more than a year last week. And the frenzy was even bigger in the options market.
As traders fretted over the risk of a major price spike, the call skew on second-month West Texas Intermediate futures jumped to the highest since March 2022, when Russia’s invasion of Ukraine sparked concerns that millions of barrels a day of oil from one of the world’s top producers would suddenly disappear from the market.
In a stunning turnaround, hedge funds, commodity trading advisors and other money managers raced to reverse positions that in mid-September had turned bearish on crude on concern that slower economic growth in China and elsewhere would crimp demand just as OPEC+ producers were getting set to boost supply. About two weeks ago, put volume peaked, with traders paying up for bearish options as futures slumped toward $70 a barrel.
But the escalation in the Middle East has changed everything. While some traders got out of calls they had previously sold, most are now looking to buy insurance against a surge in prices.
“We have seen a sizeable bid in volatility and increased demand for upside exposure to oil prices,” said Anurag Maheshwari, head of oil options at Optiver. Implied volatility has surpassed a high from October of last year, “which seems reasonable given that this escalation is potentially more impactful on oil supplies.”
Last week, traders snapped up December calls on Brent crude to bet on oil reaching $100 or higher, with aggregate call volume hitting a record on Wednesday. WTI futures surged as much as 11% amid concern that Israel might strike oil facilities in retaliation for Iran’s missile attack, raising fears of a Middle East supply disruption. The concerns eased slightly on Friday as US President Joe Biden sought to discourage such a move.
Money managers’ net long positions in Brent crude jumped by more than 20,000 contracts in the week through Oct. 1, according to ICE Futures Europe data, extending a bullish shift that started in earnest after China announced a massive stimulus package to bolster its economy.
“Option traders had given up on the idea of a rally, leaving the implied volatility in oil call options near multiyear lows,” said Carley Garner, senior strategist and founder at DeCarley Trading. “In essence, the market was unprepared for the surprise, and we are seeing FOMO now that prices are finally moving in favor of the bulls.”
As well as outright crude prices, traders also snapped up outlandish bets on the futures curve structure rallying heavily. More than 5 million barrels wagering on the nearest Brent spread hitting $3 a barrel traded last week — it was at 62 cents on Friday.
The stress on the market was seen most in short-dated contracts, with the term structure for 25-delta options showing that the bullish trading spiked in recent days. Implied volatility for December calls climbed more than 30 points last week, more than triple that for puts, while there was almost no change for either bullish or bearish positions for July contracts and onward.
The bullishness for the commodity — both on Brent and WTI — has exceeded that for producers, which are likely to see a benefit only if prices remain higher for longer. Volatility and call skew in one-month options on the US Oil Fund LP exchange-traded fund both surged more than for the SPDR S&P Oil & Gas Exploration & Production ETF.
“The escalation in the Middle East has sparked a massive amount of short covering in crude oil as CTAs have flipped from short to neutral,” said Rebecca Babin, senior equity trader at CIBC Private Wealth Group. “Fundamental energy investors remain fairly sour on 2025 and are using call options as opposed to chasing the rally in crude to get upside exposure to a potential supply disruption.”
04 October, 2024
Almost two months after shutting down two of its major fields, Libya is now resuming its operations.
Libya produces more than 1.2 million barrels of oil per day [GETTY]
Libya's eastern administration said on Thursday it had lifted a month-long oil production and exports blockade over a central bank dispute. The move comes days after new leadership for the bank was named under a UN-backed deal.
The Benghazi-based administration, which controls most of Libya's oilfields, said in a Facebook post it was "lifting the force majeure on all oil fields and resuming production and exports".
The National Oil Corporation said in a statement that it would resume production at the Sharara and El-Feel oil fields and export shipments from Es Sider, the country's largest port.
In August, the company declared "force majeure," a legal maneuver that allows a company to terminate its contracts due to extraordinary circumstances.
"As part of continuing review of the force majeure situation, we have recently received a formal security assessment concerning Sharara, El-Feel and Essider, which confirms that NOC can resume the operations of crude oil production and exporting operations to its customers," the statement read.
The National Oil Corporation previously blamed the shutdown on the Fezzan Movement, a local protest group.
However, Libyan local media reported that the suspension was placed due to retaliation by military commander Khalifa Haftar against a Spanish company that partially operates the Sharara field for an arrest warrant issued by Spanish authorities accusing him of arms smuggling.
Most recently, the divided country has been thrown again into crisis by a dispute over the governance of its Central Bank. In August, the UN warned that the government was poised to face even greater instability.
But that was resolved recently when the country's parliament appointed a new governor to the bank.
Libya produces more than 1.2 million barrels of oil per day, and Sharara is the country's largest field, producing up to 300,000 barrels per day.
The oil-rich country has been in political turmoil since a NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi in 2011.
Since then, Libya has been split between rival administrations in the east and the west, each backed by militias and foreign governments.
https://www.newarab.com/news/libya-resume-crude-oil-production-after-shutting-down?amp
Energy – Saudi raises OSPs for Asian buyers
Oil prices eased this morning as traders await new developments in the Middle East. US President Joe Biden is reportedly discouraging Israel from planning a strike on Iran’s facilities (in response to Iran’s missile attack last week). According to OPEC’s latest monthly oil market report, Iran has been producing around 3.3m bbls/d and any disruption to this supply could create shortages in the oil market.
Saudi Arabia raised its Official Selling Prices (OSP) for buyers in Asia for November loadings while trimming prices for European and US buyers. For its Arab Light crude oil, Aramco (TADAWUL: ) raised the premiums by US$0.90/bbl for Asian buyers to US$2.2/bbl. The market expected a smaller increment of around US$0.65/bbl. Meanwhile, OSPs for all grades to Europe saw cuts of US$0.9/bbl for November loadings, possibly in an effort to regain market share in the European market. The divergent price views for different regions may also hint at expectations of local imbalances in the oil market.
Drilling activity in the US remained weak over the last week. The latest rig data from Baker Hughes shows that the number of active US oil rigs decreased by five over the week to 479, the lowest since mid-July. The total rig count (oil and gas combined) stood at 585 over the reporting week, down from 587 a week earlier. This was also lower compared to the 619 rigs seen this time last year. Meanwhile, primary Vision’s frac spread count, which gives an idea of completion activity, also dropped by two over the week to 236.
Turning to speculative bets, the managed money net long position in NYMEX WTI decreased by 20,688 lots after rising for two previous consecutive weeks to 141,240 lots for the week ending 1 October 2024. The move was driven by rising shorts with gross short positions increasing by 14,102 lots to 62,643 lots over the reporting week. In contrast, speculators increased net longs in ICE (NYSE: ) by 20,013 lots for a third straight week, leaving them with net longs of 41,782 lots as of 1 October 2024. The move was driven by a combination of shorts liquidating and fresh longs. In refined products, the net bullish bets for gasoline rose by 1,883 lots for a third consecutive week to 25,762 lots over the reporting week, the highest since the week ending 16 July 2024.
Crude oil inventories in the United States rose by a shocking 10.9 million barrels for the week ending October 4, according to The American Petroleum Institute (API). Analysts had expected a build of 1.95 million barrels.
For the week prior, the API reported a 1.5-million-barrel decrease in crude inventories.
So far this year, crude oil inventories have slumped by just 5 million barrels since the beginning of the year, according to API data.
On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.3 million barrels as of October 4. SPR inventories are now at 382.9 million barrels, a figure that reflects an increase of more than 35 million from its multi-decade low last summer, yet 252 million from when President Biden took office. At the current rate of replenishment, it will take more than five years to return to January 2020 levels.
Oil prices shrugged off what is now becoming rather for the markets—threats of a possible supply shock in the wake of continued conflict in the Middle East. WTI and Brent fell sharply ahead of the API data release as traders took handsome profits from the recent oil rally and their kept their eyes on soft demand from China.
At 3:39 pm ET, Brent crude was trading down $3.46 (-4.28%) on the day at $77.47—a nearly $4 per barrel gain from this time last week. The U.S. benchmark WTI was also trading sharply down on the day by $3.29 (-4.26%) at $73.85—a $3.70 per barrel gain from this time last Tuesday.
Gasoline inventories fell this week by 557,000 barrels, compared to last week’s 900,000-barrel increase. As of last week, gasoline inventories are 1% below the five-year average for this time of year, according to the latest EIA data.
Distillate inventories fell by 2.59 million barrels, on top of last week’s 2.7-million-barrel decrease. Distillates were already about 8% below the five-year average as of the week ending September 27, the latest EIA data shows.
Cushing inventories—the benchmark crude stored and traded at the key delivery point for U.S. futures contracts in Cushing, Oklahoma, rose by 1.359 million barrels, according to API data, on top of the 700,000-barrel build of the previous week. Inventories at Cushing are now under 24 million barrels.
By Julianne Geiger for Oilprice.com
In recent developments, reports of Iran conducting a nuclear bomb test have set off alarm bells across the globe, particularly in Israel. The reports, although unverified, have prompted urgent discussions in Israel, with concerns about the shifting balance of power in the region. This development comes at a time of heightened tension between Israel and Iran, both of which have long been engaged in a war of rhetoric and regional influence.
Unverified Reports of Iranian Nuclear Test
Speculation about Iran successfully testing a nuclear device has surfaced from various intelligence sources, raising concerns in global security circles. Iran has consistently denied pursuing nuclear weapons, maintaining that its nuclear program is for peaceful purposes. However, Israel and other nations have long been skeptical of Iran’s intentions, pointing to Iran’s enrichment of uranium beyond the levels required for civilian energy production as evidence of military ambitions.
The reports, which remain unconfirmed by international bodies such as the International Atomic Energy Agency (IAEA), suggest that Iran may have reached a significant milestone in its nuclear capabilities. This potential development would drastically alter the security dynamics in the Middle East, where Israel has, until now, maintained a military advantage, partly through its own undeclared nuclear capabilities.
Israel’s Response: Shock and Strategic Reconsideration
Israel has responded with immediate alarm to these unverified reports. Israeli officials, who have been outspoken critics of the Iranian regime, were reportedly preparing for a potential military strike on Iran’s nuclear facilities, a strategy that has been discussed in Israel for years. However, the latest intelligence reports have cast doubt on the viability of such a plan, especially if Iran indeed possesses operational nuclear weapons.
The possibility of a nuclear-armed Iran presents a strategic nightmare for Israel, which has long relied on its qualitative military edge, including its own advanced missile defense systems such as the Iron Dome and David’s Sling, to defend against regional threats. A nuclear Iran would fundamentally alter Israel’s threat perception and may lead to a reassessment of its military strategies and alliances in the region.
Canceling Plans for a Strike on Iran
According to Israeli sources, the potential nuclear test has forced the government to reconsider its previous plans to launch pre-emptive strikes on Iran’s nuclear facilities. Israeli military planners have reportedly advised against any immediate action, given the risks of nuclear escalation and the potential for massive retaliation from Iran and its regional allies, such as Hezbollah in Lebanon and Shiite militias in Iraq and Syria.
Israel’s decision to halt these attack plans is also influenced by geopolitical factors, particularly the stance of the United States and European allies. The Biden administration has been attempting to revive the Iran nuclear deal (JCPOA), which aims to limit Iran’s nuclear activities in exchange for sanctions relief. Any unilateral military action by Israel could undermine these diplomatic efforts and lead to broader regional conflict.
Diplomatic Efforts and Regional Implications
While Israel has temporarily shelved its plans for a military strike, it is actively pursuing diplomatic channels to address the situation. Israeli Prime Minister Benjamin Netanyahu has called for urgent consultations with U.S. officials, and Israel is expected to intensify its lobbying efforts in Washington for a tougher stance against Iran.
In the broader Middle East, the possibility of a nuclear Iran is causing alarm among Arab states, many of which have normalized relations with Israel through the Abraham Accords. Countries like Saudi Arabia and the United Arab Emirates, which view Iran as a major regional rival, are likely to push for stronger security guarantees from the U.S. and possibly enhance their own military capabilities in response.
A Dangerous New Phase
The unverified reports of an Iranian nuclear test mark a dangerous new phase in the longstanding tensions between Israel and Iran. While the reports are not confirmed, they have already led to a significant shift in Israel’s strategy, prompting it to cancel its attack plans on Tehran’s nuclear facilities. As the situation continues to evolve, the international community will closely watch how Israel, Iran, and other regional players respond to this potential new reality.
This incident underscores the fragility of security in the Middle East and the potential for conflict escalation if diplomatic solutions are not pursued aggressively. Whether or not Iran has truly tested a nuclear weapon, the mere possibility has triggered a recalibration of military and diplomatic strategies across the region.
Kazakhstan's biggest oil field Tengiz, operated by U.S. major Chevron CVX, boosted output to a record high in October, sources told Reuters, potentially complicating the country's future efforts to comply with its OPEC+ quota.
OPEC+ has named top 10 global oil producer Kazakhstan along with Iraq and Russia as countries that have repeatedly failed to comply with its pledges to curb oil production this year.
Tengiz boosted daily production to 699,000 bpd in early October from 687,000 bpd in September, when output increased by 30% from August after the completion of maintenance, said two industry sources familiar with the data.
The field's operator Tengizchevroil, which has invested more than $70 billion since the project's inception in 1993, said its operations were continuing as usual and declined further comment.
Chevron CVX owns a 50% stake in the venture. Exxon Mobil XOM controls 25%, KazMunayGaz 442AC has a 20% stake, and Russia's Lukoil LKOH owns 5%.
The Kazakh energy ministry did not reply to a request on comment about oil production plans for 2024 and 2025.
Kazakhstan - which relies on Tengiz and two other major fields, Karachaganak and Kashagan, for most of its production - is subject to output targets as a member of OPEC+, an alliance of OPEC and other top producers led by Russia
The country's oil production quota under the OPEC+ deal stands at 1.468 million bpd, a target it exceeded in September by around 170,000 bpd, according to Reuters calculations.
It is likely to remain within its targets this month because it will shut down the Kashagan field for maintenance, sources said.
Overall October production data from Kazakhstan is not yet available, but sources said Karachaganak will produce its regular volumes of 228,000 bpd, while maintenance at Kashagan will entail a complete stoppage of its 400,000 bpd facility.
While that means Kazakhstan will be able to achieve its October quota, the sources said, complying with OPEC+ quotas might become problematic again when the field returns from maintenance in November.
"Taking into account the expansion of Tengiz, compliance with the quota could become impossible," one of the sources said.
Chevron and its partners plan to expand output at the Tengiz project to 850,000 bpd in the first half of 2025. Expansion costs at the project stand at around $49 billion.
OPEC will release estimates of its members' September oil output next week.
The group's leader Saudi Arabia has repeatedly called on rival producers to improve compliance, saying it was the most paramount immediate task before OPEC+ embarks on releasing more barrels from December.
Global oil demand is set to grow next year at a lower rate than previously expected, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) for October, as it slashed its Brent oil price forecasts for 2025 due to lower expected demand increase.
The EIA now expects global oil demand to grow by 1.3 million barrels per day (bpd) in 2025, due to downgraded forecasts of consumption in developed economies in the OECD.
In the September STEO, the EIA had projected global consumption of liquid fuels would increase by 1.5 million bpd in 2025.
In the October outlook, the administration reduced its forecast of total OECD oil consumption by 200,000 bpd in 2025 compared with last month’s STEO, as a result of weaker expectations for industrial production and manufacturing growth in the United States and Canada.
Most of the EIA’s expected global liquid fuel demand growth is from non-OECD countries where liquid fuels consumption is set to increase by 1.0 million bpd in 2024 and 1.2 million bpd in 2025. This would be in contrast to consumption in OECD countries, which is projected to fall by 100,000 bpd in 2024 before increasing by a similar amount in 2025.
For the U.S., the EIA cut its estimate of liquid fuel consumption to 20.49 million bpd in 2025, down from the September estimate of 20.64 million bpd.
In the October STEO, the EIA slashed its forecast for the Brent crude oil spot price through the end of next year. In this month’s outlook, the administration expects the Brent price will average $78 per barrel in 2025, which is $7 a barrel less than the forecast in last month’s STEO. Lower crude oil prices in the forecast “largely reflect a reduction for global oil demand growth in 2025,” the EIA said.
Early on Wednesday, Brent Crude prices were slightly down by 0.4% at $76.80.
By Tsvetana Paraskova for Oilprice.com
Oil prices have seen their most volatile start to a month in almost two years as the spiraling tensions between Iran and Israel spur a bumper bout of volatility.
So far in October, Brent crude has traded in an average daily range of $3.73, the biggest for the same period in any month since December 2022, according to data compiled by Bloomberg.
Prices have gyrated mainly on the risk that Israel’s retaliation for a missile attack by Iran will involve energy infrastructure in a region that accounts for a third of the world’s oil output. But there have also been macro-economic drivers, including a blowout U.S. jobs report late last week followed by a strong market reaction to stimulus from China.
“The high level of volatility can lead to false positives in terms of buy/sell signals — making for a very challenging environment if you want to initiate directional trades,” said Harry Tchilinguirian, group head of research at Onyx Capital Group.
The sharp swings have also coincided with bumper activity in the oil options market. On average close to 250 million barrels of bullish calls have changed hands in each of the last 10 days, a record, as traders seek to protect against both higher levels of volatility and a price spike.
Those volumes have seen significant additions of call-option open interest at $100 for both West Texas Intermediate and Brent.
“Where do we see the positioning in oil, it’s in the options, which is part of the reasons why we see big moves,” said Jeff Currie, chief strategy officer for energy pathways at Carlyle Group. “I think it goes to that short-term, near-term myopic approach of trading oil.”
Oil prices slid on Tuesday, settling down more than 4 percent on news of a possible cease-fire between Hezbollah and Israel, although prices found some support on fears of a potential attack on Iranian oil infrastructure.
Brent crude futures settled down $3.75, or 4.63 percent, at $77.18 a barrel. U.S. West Texas Intermediate futures finished down $3.57, or 4.63 percent, at $73.57 a barrel. At their session lows, both were down more than $4 a barrel.
"We continue to be very headline dependent," said John Kilduff, partner with Again Capital LLC. "This morning, we heard about the potential cease-fire. Then we got indications targets are still being dialed in and energy targets are in the mix."
"That Hezbollah is open to a cease-fire, is the kind of headline that people jump on," said Phil Flynn, senior analyst at Price Futures Group. "There should be a lot of volatility up and down on this conflict."
On Monday, Brent rose above $80 per barrel for the first time since August after more than a 3 percent daily gain. That followed the largest weekly gain in over a year, roughly 8 percent, in the week to Friday on rising concerns of a spreading war in the Middle East.
Hezbollah left the door open to a negotiated cease-fire after Israeli forces raised the stakes in the conflict with its Iran-backed enemy by making new incursions in the south of Lebanon.
Israeli defense minister Yoav Gallant said it appeared the replacement for slain Hezbollah leader Sayyed Hassan Nasrallah had also been eliminated.
Late on Tuesday, Israel's military warned people away from specific buildings in the southern suburbs of Beirut.
The oil price rally began after Iran launched a missile barrage at Israel on Oct. 1. Israel has sworn to retaliate and said it was weighing its options.
Some analysts said an attack on Iranian oil infrastructure was unlikely and warned oil prices could face considerable downward pressure if Israel focuses on any other target.
In the U.S., Hurricane Milton intensified into a Category 5 storm on its way to Florida after forcing at least one oil and gas platform in the Gulf of Mexico to shut on Monday.
U.S. crude oil stocks rose by nearly 11 million barrels last week, while fuel stockpiles fell, according to market sources citing American Petroleum Institute figures on Tuesday.
Crude stocks rose by 10.96 million barrels in the week ended Oct. 4, the sources said on condition of anonymity. Gasoline inventories fell by 557,000 barrels, and distillate stocks fell by 2.60 million barrels, they said. (Reuters)
https://www.koreatimes.co.kr/www/world/2024/10/501_383893.html
Oil Shorts Aren’t Ready to Give Up
By Alex Kimani - Oct 09, 2024, 7:00 PM CDT
The big oil price rally that kicked off last week and increased oil prices by nearly $10 per barrel has started unwinding. Brent crude futures for December delivery were trading at $76.63/barrel at 11.40 am ET on Thursday while WTI crude was changing hands at $73.24/barrel. That marks a sharp fall from their Monday 2-month high of $81.12 for Brent and $77.91 for WTI crude. The rally was triggered by Washington’s indication that Israel could strike Iran’s oil facilities.
Citi analysts have provided estimates that a major strike by Israel on Iran's export capacity could take 1.5M bbl/day of crude off the market, while an attack on downstream assets and other relatively minor infrastructure could take out 300K-450K bbl/day. According to ANZ Bank, Iran's oil output hit a six-year high of 3.7M bbl/day in August.
Meanwhile, Clearview Energy Partners has predicted that oil prices could gain as much as $28/bbl if flows are blocked in the Strait of Hormuz; $13/bbl if Israel strikes Iranian energy infrastructure and $7/bbl if the U.S. and its allies placed economic sanctions on Iran.
Unfortunately for oil price bulls, the shorts are not about to give up. According to commodity experts at Standard Chartered, the latest rally was triggered by short sellers running to cover after the Middle East crisis escalated. However, StanChart has warned that short sellers are not running for the hills. According to the analysts, once the unwinding of the undershoot in prices is accounted for, the market response to events in the Middle East, and particularly the threats made against Iranian energy infrastructure, was very underwhelming. StanChart notes that Brent’s front-month settlement on 7 October was lower than the settlement for the equivalent days in 2021, 2022 and 2023 while prompt prices have merely returned to where they were as recently as late August. There’s been little change to the overwhelmingly bearish sentiment that has dominated the oil market over the past three months, with many traders still prepared to short oil aggressively if the daily news flow and market momentum allow for it.
Indeed, positioning data shows little change in the week up to settlement on 1 October, with money-manager net selling of WTI crude futures exceeding net buying. StanChart’s proprietary crude oil positioning index was little changed w/w at -69.1. Neither the latest China stimulus nor the increase in violence in the Middle East seems to fluster the shorts.
The unfolding oil price selloff was triggered by the release of the latest Energy Information Administration (EIA) weekly report, which StanChart rates highly bearish according to its U.S. oil data bull-bear index. Total commercial inventories fell 0.91 mb w/w to 1.267.08 mb, with the deficit below the five-year average increasing by 1.72 mb to a 20-week high of 20.74 mb. Unfortunately, the bull-bear index was heavily affected by increases in crude oil, gasoline and distillates inventories in both absolute terms and against the five-year averages. Crude oil inventories rose by 3.89 mb w/w to 416.93 mb, with the deficit below the five-year average shrinking by 3.46 mb to 18.44 mb. StanChart points to a highly unusual trend whereby every element in the w/w crude balance changes was in the direction of higher inventories; higher domestic output, higher imports, lower exports, lower refinery runs, slower SPR fill and a higher adjustment term.
Europe’s natural gas prices slip
Meanwhile, European natural gas futures dropped below €40 per megawatt-hour to €38.52 per megawatt-hour, retreating from a 10-month high of €41 reached earlier in the week. The decline was largely driven by increased wind power generation coupled with a stable supply of Norwegian gas.
EU gas inventory builds have remained slow, with the increase over the past week falling to less than 30% of the five-year average. According to data by Gas Infrastructure Europe (GIE), Europe’s gas inventories stood at 111.05 billion cubic meters (bcm) on 6 October, good for a w/w build of 391 million cubic meters (mcm). Three of the daily changes were below 50 bcm, including a 42 mcm draw on 2 October. The deficit below last year has risen to 1.5 bcm, while the surplus above the five-year average has shrunk to a 23-month low of 6.17bcm. The current pace of inventory build implies this year’s seasonal maximum might only reach 112 bcm instead of the previous prediction of 166 bcm going by August's clip.
https://oilprice.com/Energy/Crude-Oil/Oil-Shorts-Arent-Ready-to-Give-Up.html
ST. PETERSBURG. Oct 10 (Interfax) - Hungary has independently solved the problem of Russian oil supply resumption to the fullest, without any support provided by the European Union, Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto told reporters on the sidelines of the St. Petersburg International Gas Forum.
Oil supply has resumed, the contract has been amended, and oil is now delivered to the border of Belarus and Ukraine, he said.
The European Commission has given no assistance to Hungary, Szijjarto said. It is completely wrong and inadmissible for an EU candidate, Ukraine, to play games with the reliable energy supply to two EU member states, Hungary and Slovakia, he said.
It is a task of the European Commission to assist in the provision of safe energy supply, Szijjarto said. Ukraine took the unilateral step without issuing a notice or providing information to Hungary, and cut Hungarian oil imports by a third, he said, adding that Budapest had to adjust its contract with Russian suppliers.
Hungary and Slovakia stopped receiving pipeline oil from the Russian oil company Lukoil shipped via the Druzhba pipeline in the middle of July due to a transit ban imposed by Ukraine. Kiev tightened sanctions on Lukoil, effectively banning oil transport to Central Europe across Ukraine via the Druzhba pipeline. Lukoil is a major supplier to Hungary, where it accounts for around one third of crude imports, and to Slovakia with 40%-45%.
In September, the Hungarian MOL Group signed contracts with oil suppliers and pipeline operators to ensure continuous oil transportation by the Druzhba pipeline to Hungary and Slovakia via Belarus and Ukraine. The oil delivered to the border of Belarus and Ukraine has been designated property of MOL Group since September 9.
The updated contracts fully comply with all restrictions, including those imposed by the European Union and Ukraine.
The Japanese government announced a decision Sunday to expand a Japan-South Korea cooperation framework aimed at reducing emissions of methane from natural gas development projects.
Twenty-two Japanese companies, including Kansai Electric Power, Tokyo Gas and trader Mitsubishi, will newly join the framework, according to the government.
The government made the announcement at a meeting of liquefied natural gas producing and consuming countries in the city of Hiroshima.
Member companies on the procurement side will confirm efforts to reduce methane emissions by firms involved in natural gas production and urge them to disclose related information. Some firms have already given consent to the disclosure.
Methane's greenhouse effect is believed to be more than 20 times that of carbon dioxide. Leaks of methane from gas fields are a major issue that need to be dealt with.
The cooperation framework was announced at last year's meeting between LNG producing and consuming countries by Jera, a joint venture between the Tokyo Electric Power Company Holdings group and Chubu Electric Power and Korea Gas or KOGAS
The combined amount of LNG handled by Jera, KOGAS and the 22 new member companies a year stands at about 100 million tons, or some 25% of the total global LNG distribution volume. Information such as the amount of methane emissions from production facilities will be announced in an annual report.
Also at the Sunday meeting, the government-backed Japan Organization for Metals and Energy Security, or JOGMEC, and major Italian energy company ENI signed a memorandum of cooperation on diversifying LNG procurement sources.
The Japanese and Italian governments will shortly come up with a memorandum of cooperation for stable supplies of LNG.
Japan and South Korea agreed to conduct a test on LNG-related cooperation between the two countries' private sectors.
https://www.japantimes.co.jp/news/2024/10/06/japan/japan-south-korea-cut-methane-emissions/
A consortium led by US oil supermajor ExxonMobil ( Exxon ) has awarded a front-end engineering design contract to the French company Technip Energies ( Technip ) for a proposed liquefied natural gas (LNG) project in Mozambique .
The Rovuma LNG project, for which the final investment decision (FID) is likely in 2026, will have a nameplate capacity of 18mn tonnes per year and comprise 12 modular LNG trains of 1.5mn tpy each.
Exxon is the operator and Italian major Eni and China National Petroleum Corporation (CNPC) are its partners.
Technip said in a release on September 25 that it and JGC Corp. ( Japan ) were "honoured" to have won the contract for what will be Mozambique’s largest LNG plant.
The design will feature electric-driven LNG trains instead of gas turbines, reducing greenhouse gas emissions compared to conventional LNG projects. In addition, it will feature prefabricated and standardised modules to be assembled at the project site in northern Mozambique . This, it said, will be cost-competitive.
Mario Tommaselli , SVP Gas and Low Carbon Energies of Technip said: “By leveraging our expertise in modularisation and electrified LNG, we are committed to supporting ExxonMobil and its partners towards final investment decision, as well as strengthening our presence in Mozambique to contribute to long-term economic growth and its ambition to become one of Africa’s leading LNG exporters.”
Mozambique has attracted large investments into its developing LNG industry underpinned by the discovery of up to 180 trillion cubic feet (5 trillion cubic metres) of recoverable gas, most of it in offshore Rovuma Basin to the north. Eni started producing LNG at its floating plant in October 2022 , while TotalEnergies ( France ) expects to resume developing its 13mn tpy onshore plant in the same basin by December 2024 .
Farhan Mujib , representative director, president of JGC, hailed the environmental sustainability of the proposed project.
“With the global focus on decarbonisation and energy security, the JGC Group is accelerating the promotion of energy transition, and this project is firmly in line with the direction of our strategy. We are convinced this project of national significance will contribute to enhancing economic and industrial growth in Mozambique and East Africa ," said Mujib.
DUBAI, Oct 6 (Reuters) – Iran’s oil minister landed on Kharg Island, home to the country’s main export terminal, and held talks with a naval commander on Sunday, the oil ministry’s news website Shana reported, amid concern Israel could attack energy facilities.
An Israeli military spokesman said on Saturday that Israel would retaliate in response to last week’s missile attack by Tehran “when the time is right.”
U.S. news website Axios cited Israeli officials as saying Iran’s oil facilities could be hit, while U.S. President Joe Biden said on Friday that he did not think Israel had yet concluded how to respond.
Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) with production of around 3.2 million barrels per day (bpd), or 3% of global output. Iranian oil exports have climbed this year to near multi-year highs of 1.7 million bpd despite U.S. sanctions.
Most of its oil and gas wealth is located in the south of the country, where the Kharg Island terminal is situated and from which around 90% of Iranian oil exports are shipped.
Oil Minister Mohsen Paknejad arrived on Sunday “to visit the oil facilities and meet operational staff located on Kharg Island,” Shana reported, adding that the oil terminal there has the capacity to store 23 million barrels of crude.
State media reported Paknejad met with Mohammad Hossein Bargahi, a Revolutionary Guards Navy commander, to check the security of Iran’s South Pars gas platforms and assess the effective actions of the Guards’ 4th Naval Region.
“The Islamic Revolutionary Guard Corps Navy plays an important role in the security of oil and gas facilities,” Paknejad was quoted as saying.
China, which does not recognize U.S. sanctions, is Tehran’s biggest oil customer and according to analysts imported 1.2 to 1.4 million barrels per day from Iran in the first half of 2024.
(Reporting by Dubai Newsroom; Editing by Hugh Lawson and Barbara Lewis)
(c) Copyright Thomson Reuters 2024.
https://gcaptain.com/irans-oil-minister-inspects-export-terminal-amid-fears-of-israeli-strike/
BISMARCK — A federal judge in North Dakota has temporarily blocked a new Biden administration rule aimed at reducing the venting and flaring of natural gas at oil wells.
U.S. District Judge Daniel Traynor ruled on Sept. 13 that plaintiffs’ claims the rule was “arbitrary and capricious” was likely to succeed, the Bismarck Tribune reported.
North Dakota, along with Montana, Texas, Wyoming and Utah, challenged the rule in federal court earlier this year, arguing that it would hinder oil and gas production and that the Interior Department's Bureau of Land Management is overstepping its regulatory authority on non-federal minerals and air pollution.
The bureau says the rule is intended to reduce the waste of gas and that royalty owners would see over $50 million in additional payments if it was enforced.
But Traynor wrote that the rules "add nothing more than a layer of federal regulation on top of existing federal regulation."
When pumping for oil, natural gas often comes up as a byproduct. Gas isn't as profitable as oil, so it is vented or flared unless the right equipment is in place to capture.
Methane, the main component of natural gas, is a climate "super pollutant" that is many times more potent in the short term than carbon dioxide.
Well operators have reduced flaring rates in North Dakota significantly over the past few years, but they still hover around 5%, the Tribune reported. Reductions require infrastructure to capture, transport and use that gas.
SOUTH DAKOTA
Families sue state over giant sinkholes
Stuart and Tonya Junker loved their quiet neighborhood near South Dakota's Black Hills — until the earth began collapsing around them, leaving them wondering if their home could tumble into a gaping hole.
They blame the state for selling land that became the Hideaway Hills subdivision despite knowing it was perched above an old mine. Since the sinkholes began opening up, they and about 150 of their neighbors sued the state for $45 million to cover the value of their homes and legal costs.
Sinkholes are fairly common, due to collapsed caves, old mines or dissolving material, but the circumstances in South Dakota stand out, said Paul Santi, a professor of geological engineering at the Colorado School of Mines.
Crews built Hideaway Hills, located a few miles northwest of Rapid City, from 2002 to 2004 in an area previously owned by the state where the mineral gypsum was mined for use at a nearby state-owned cement plant.
Attorney Kathy Barrow, who represents residents who live in 94 subdivision homes, said the state sold the surface but held on to the subsurface, and it did not disclose it had removed the soil's natural ability to hold up the surface.
Since that first giant collapse, more holes and sinkings have appeared and there are now "too many to count," Barrow said. The unstable ground has affected 158 homes plus destabilized roads and utilities.
In court documents, the state called the sinkhole formation “tragic” but argued that it wasn't the fault of state officials. The state traced the area's mining history to the 1900s, noting a company that mined underground and on the surface before 1930. Beginning in 1986, the state-owned cement plant mined for several years.
The state claimed it wasn't liable for damages related to the underground mine collapse because the cement plant didn't mine underground and the mine would have collapsed regardless of the plant's activities.
By Katya Golubkova / Reuters
06 Oct 2024, 10:50 am
HIROSHIMA (Oct 6): Italian energy company Eni is in talks with Japan on supplying the country with liquefied natural gas (LNG), Cristian Signoretto, Eni's director for global gas and LNG portfolio, told reporters on the sidelines of a conference on Sunday.
"We already deal with Japanese buyers on a short-term basis and we would like to expand that collaboration also to a long-term basis," Signoretto said, adding that Eni plans to bring more LNG volumes to the market including from Indonesia and also wants Japanese financial institutions to support some projects.
Eni plans to build its LNG portfolio to 18 million metric tonnes per year by 2027 and would be ready to commit part of it to Japan if the opportunity is there, he added.
Signoretto said it was early to say about the specifics of the discussions, including whether Eni would insist on destination clauses, which are obligations in contracts for the buyer not to resell the gas to third parties.
In recent years, there has been a growing demand among Japanese buyers for deals with shorter duration and without destination clauses as this allows buyers in Japan, the world's second-biggest LNG importer, to stay flexible and also to resell LNG.
"Flexibility will be part of the discussion," Signoretto said, without providing details.
Uploaded by Magessan Varatharaja
EQT Corporation EQT has gained 1.2% in the past six months, outpacing the 0.9% improvement of the composite stocks belonging to the industry.
What's Favoring the EQT Stock?
EQT, a leading natural gas producer in North America, carries a Zacks Rank #3 (Hold) and has established a strong presence in the highly productive Appalachian Basin. With numerous prime drilling locations throughout this gas-rich region, the company's production prospects are robust. As natural gas is a cleaner-burning fossil fuel, EQT is well-positioned to benefit from the growing demand for clean energy sources. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company is at the forefront among the composite stocks when it comes to establishing emissions reduction goals. EQT’s ambitious goal is to achieve net zero scope 1 and scope 2 greenhouse gas emissions by 2025 or sooner.
Risks to EQT’s Business
EQT's engagement in exploration and production activities leaves it vulnerable to significant fluctuations in oil and gas prices, resulting in a highly unpredictable business environment for this upstream energy company. Some other major exploration and production firms that are also exposed to commodity price volatility are ConocoPhillips COP, Diamondback Energy, Inc. FANG and EOG Resources EOG.
ConocoPhillips has secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale.
Diamondback Energy, a leading pure-play Permian operator, has reported ongoing enhancements in the average productivity per well in the Midland Basin. Thus, the exploration and production company will likely continue witnessing increased production volumes.
In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook.
https://finance.yahoo.com/news/heres-why-investors-hold-eqt-131500131.html
Randy Ollenberger, managing director and oil and gas equity research at BMO Capital Markets, joins BNN Bloomberg to share his outlook on energy stocks.
(Bloomberg) -- Shell Plc saw continued strong performance from its natural gas and upstream businesses in the third quarter, even as oil-refining margins declined and it expects to lose money in chemicals.
Integrated gas production during the period was likely 920,000-960,000 barrels of oil-equivalent a day, in line with second-quarter output, the company said in a trading update Monday.
Shares rose as much as 0.7% in early trading in London.
“The positives outweigh the negatives, with both the upstream and integrated gas likely to see upgrades,” said Biraj Borkhataria, head of European energy research at RBC Europe Ltd.
European gas prices rose 13% in the third quarter. The market has been volatile, with price increases due to factors including unplanned outages and concerns over continued supply from Russia via Ukraine.
Separately, the margin earned for refining crude dropped 29% in the period to $5.50 a barrel, Shell said. That metric actually ticked higher for chemicals, but the company nevertheless said it expects a “marginal loss” in the business.
Shell’s largest rival, Exxon Mobil Corp., warned last week that lower oil prices and weaker refining margins would curb its third-quarter earnings by $1.6 billion. Brent crude, the international benchmark, plunged by 17% in the period amid growing concerns about the strength of China’s economy.
The unexpected weakness in what is typically one of the strongest seasons for demand has forced big players in the oil market to adjust, with the Organization of Petroleum Exporting Countries and its allies delaying the restart of some idle production. Prices have since rebounded due to tensions in the Middle East.
While the international majors are braced for weaker profits, there’s so far no sign that they’ll curtail returns to investors. French oil and gas producer TotalEnergies SE has pledged to maintain buybacks and keep boosting dividends next year thanks to the roll-out of new projects.
Shell will publish its full third-quarter results on Oct. 31.
(Updates with additional details on natural gas from first paragraph.)
©2024 Bloomberg L.P.
KYIV (Reuters) -Ukraine will not extend its gas transit agreement with Russia after it expires at the end of 2024, Ukrainian Prime Minister Denys Shmyhal told Slovak Prime Minister Robert Fico on Monday.
The two held talks in Uzhhorod in western Ukraine and, according to a Ukrainian official, were focused on infrastructure cooperation, energy security and support for Kyiv’s peace plan.
“Ukraine once again says it will not continue the transit agreement with Russia after it expires,” Shmyhal told a news conference sitting alongside Fico.
“Ukraine’s strategic goal is to deprive the Kremlin of profits from the sale of hydrocarbons which the aggressor uses to finance the war.”
Slovakia, a member of NATO and the EU which shares a border with Ukraine, opposes Kyiv’s accession to NATO, but has a strong interest in maintaining the transit of oil and gas from Russia to the west via Ukraine.
Slovak state-owned gas buyer SPP said this month it was continuing negotiations to secure an extension of gas transit through Ukraine after Kyiv’s contract with Russian supplier Gazprom expires at the end of the year.
Shmyhal said that Kyiv understands the “acute dependence” of some states, including Slovakia on the Russian gas supply, but is counting on gradual diversification of delivery.
Ukraine’s prime minister also said the two countries had agreed on the creation of an Eastern European energy hub, which aims to utilise large Ukrainian gas storage facilities.
BIG CRITIC
Fico has been a big critic of Western military aid to Ukraine, along with Hungarian Prime Minister Viktor Orban, and has made a big show of halting government-sponsored military aid to Ukraine while allowing commercial supplies to continue.
He reiterated his view that there was no military solution to the Ukrainian-Russian war.
“Peace must be sustainable, you have to have security guarantees. Above all, sovereignty and territorial integrity of Ukraine must be respected. We understand all that,” Fico said.
He said the talks with Ukraine’s government confirmed that Kyiv remained interested in using its gas and oil transit systems after the deal with Russia expires.
“I welcome our discussion which confirmed that you, like us, have an interest in the transit system you have on Ukrainian territory continuing to be used, when it comes to both oil and gas,” Fico added.
(Reporting by Anastasiia Malenko, Pavel Polityuk, Jan Lopatka and Jason Hovet; Editing by Gareth Jones and Ed Osmond)
Chevron Corp. agreed to sell its stakes in some oil sands and shale assets to Canadian Natural Resources Ltd. for $6.5 billion.
The deal relates to Chevron’s 20% interest in the Athabasca Oil Sands Project and a 70% holding in the Duvernay shale, both located in the Canadian province of Alberta, according to a statement from the company Oct. 7. The all-cash transaction has an effective date of Sept. 1 and is expected to close during the fourth quarter, subject to regulatory approvals.
The asset sale comes as Chevron focuses its growth plans increasingly in other parts of the world, notably the Permian basin in the U.S. and the Tengiz field in Kazakhstan, where a $48.5 billion expansion project is nearing completion.
Chevron is also in the process of acquiring Hess Corp. for $53 billion, a deal that would boost its presence in the South American country of Guyana, one of the world’s exploration hot spots.
Canada’s oil sands have been in production for decades but the industry is undergoing a significant change since completing the expansion of the Trans Mountain pipeline, which opened Asian markets for the country’s crude.
Previously, the Canadian oil industry was dependent on U.S.-bound pipelines and American refiners, resulting in deeper discounts for its crude and leaving it vulnerable to price shocks. From June to mid-September, the pipeline expansion had allowed the shipment of 28 million more barrels of crude to the country’s west coast, almost two-thirds of which headed to China, India, South Korea and Brunei.
Kyiv: Ukrainian Prime Minister Denys Shmyhal and his Slovak counterpart Robert Fico have agreed to establish an Eastern European energy hub, the media reported.
“It will strengthen the energy security of both our states and the entire European region,” Shmyhal said on Monday after a meeting with Fico near Ukraine’s western city of Uzhhorod.
He added that the energy hub aims to utilise Ukraine’s gas storage facilities, develop the Mukachevo-Velke Kapusany electricity interconnector between the two countries, and enhance nuclear energy cooperation, Xinhua news agency reported.
He further said that Ukraine does not plan to extend its natural gas transit contract with Russia, which expires this year.
However, Shmyhal said that Kyiv remains committed to fulfilling its obligations under the Association Agreement with the European Union and the Energy Charter Treaty.
“I would like to emphasise that Slovakia is the second largest electricity supplier in terms of both emergency and commercial transmission. This allows us to respond to the energy challenges of wartime,” the head of the Ukrainian government added.
As Ukrinform news agency reported earlier, on Monday, Shmyhal met with Fico just outside Uzhhorod in western Ukraine. The heads of government discussed cooperation in the field of energy security and infrastructure projects.
Ukraine’s state-run energy company Naftogaz and Russia’s gas giant Gazprom signed a gas transportation agreement in December 2019.
Last year, Russia transported 14.646 million cubic metres of gas through Ukraine.
–IANS
https://newsroomodisha.com/ukraine-slovakia-agree-to-set-up-eastern-european-energy-hub/
(Bloomberg) -- The US expects crude production to grow by just 320,000 barrels a day next year, much slower than previously estimated.
While output is still poised to reach a record of 13.54 million barrels a day, the annual rate of growth is now projected at 2.4% versus 3.2%, the Energy Information Administration said in its Short-Term Energy Outlook Tuesday. The slowdown comes after a surprise bumper increase last year.
Since then, the number of oil rigs operating in the US has plummeted and is hovering near the lowest since late 2021, fueling expectations that shale producers will continue to prioritize shareholder returns over growth.
The trajectory of US oil production has become a key factor for market participants gauging balances for next year, particularly as much of growth is expected to coincide with the return of supplies from OPEC members and allies.
The agency also revised lower its 2025 stimate for global oil demand, which is seen growing by 1.2 million barrels a day compared to last month’s estimate of 1.5 million barrels a day. Supplies, meanwhile, are seen holding steady, adding to growing chorus of calls for an oversupplied oil market next year. The International Energy Agency projects that global demand will grow less than 1% in 2025.
--With assistance from Alex Longley.
©2024 Bloomberg L.P.
Chevron evacuated and shut in its Blind Faith oil and gas production platform in the Gulf of Mexico in advance of Hurricane Milton, which has strengthened into a category 5 storm as it barrels toward Florida's west coast.
Output from Chevron's other operated facilities in the region remains at normal levels, the company said today. The 65,000 b/d Blind Faith platform is located around 160 miles southeast of New Orleans.
Milton, with maximum sustained winds of 160 mph, was about out 130 miles west of Progreso, Mexico, according to an 11am ET National Hurricane Center advisory. The storm will move through the Campeche Bank offshore region north of Mexico's Yucatan peninsula — where state-owned Pemex's largest oil and natural gas production operations are located — today and Tuesday, then cross the eastern Gulf of Mexico and approach the west coast of the Florida Peninsula by Wednesday.
On its current track, the hurricane is expected to skirt to the south of the majority of US offshore oil and natural gas platforms in the Gulf of Mexico. The region accounts for around 15pc of total US crude output and 5pc of US natural gas production.
Hurricane Helene temporarily shut in up to 29pc of oil production and 20pc of gas output in the Gulf of Mexico late last month.
Oct 8 (Reuters) - Energy companies began shutting down their pipelines and fuel-delivery terminals in Tampa, Florida, on Tuesday ahead of Hurricane Milton's expected landfall on Wednesday.
Kinder Morgan (KMI.N), opens new tab said it shut down its Central Florida Pipeline system, two small lines that carry gasoline, diesel and other fuels from Tampa to Orlando. It also closed all bulk-fuel delivery terminals in the Tampa area.
"While the Tampa terminal is shut down, our Orlando truck racks are expected to remain operational until winds exceed 35 miles per hour," Kinder Morgan added.
Refiner Citgo (PDVSAC.UL) also shut down its Tampa terminal, the company said in an email, while Buckeye said it suspended operations at its Tampa terminal facilities.
Hurricane Milton was last located 520 miles (840 km) southwest of Tampa, packing maximum sustained winds of 155 mph (250 kph).
Milton is forecast to retain its major hurricane status and expand in size as it approaches the west coast of Florida.
Electricity pylons run through fields near Amersham, Britain, September 29, 2023.
LONDON, Oct 8 (Reuters) - Britain's electricity and gas grid operators expect sufficient supplies this winter, with more power imports and domestic generation available than last year and high gas storage levels in Europe, they said on Tuesday.
Britain's National Energy System Operator (NESO) and National Gas publish annual reports about the supply and demand picture for the coming winter to help business and government prepare.
"It is positive to see that (electricity) margins forecast for this winter are the highest since 2019/20," said Craig Dyke, director of system operations at NESO.
NESO said its base case for de-rated margin, which is a measure of the amount of excess capacity expected above peak electricity demand, is currently 5.2 gigawatts (GW) for winter 2024/25, or 8.8% the peak average cold spell demand, up from 4.4 GW, or 7.4% last winter.
The improved margin comes despite the closure of Britain's last coal plant last month.
More interconnection with Europe, after the opening of a 1.4 GW power link between Britain and Denmark at the end of 2023, more generation and battery capacity had led to the increase, NESO said.
Wholesale energy costs have stabilised since Russia's invasion of Ukraine sparked record high prices in 2022 but NESO warned there is a still a risk geopolitical events could impact the market.
"While the overall energy system is showing greater resilience, disruptions in global energy markets remain a possibility," the report said.
NESO expects peak electricity demand at 44.4 GW this winter, similar to the 44.9 GW peak seen last winter.
GAS SUPPLY
Britain uses gas for around a third of its electricity production while around 75% of the country's homes are also heated by the fuel.
Sufficient gas supplies expected with solid supply from Norway, imports of Liquefied Natural Gas and Europe's gas storage sites almost full, National Gas said in its winter outlook.
With escalating tensions in the Middle East however, it is also monitoring global events.
"Factors beyond our control such as the weather, global market developments, and the wholesale cost of gas will all influence the gas supply and demand situation in GB," Ian Radley, National Gas System Operator Director said.
Demand from homes is expected to be higher than last year due to slightly lower energy prices while demand from power plants is expected to dip as increased renewable generation comes online.
Peak day gas demand this winter is expected at 474 million cubic metres (mcm)/day versus a peak supply capacity of 601 mcm/d, National Gas said.
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Reporting By Susanna Twidale; editing by David Evans
(Bloomberg) -- Analysts at BNP Paribas Exane downgraded their ratings on three major oil companies due to an expected further decline in crude prices, with Exxon Mobil Corp. getting its first sell-equivalent rating in over a year.
“Substantial excess OPEC+ capacity is hanging over the sector like the Sword of Damocles,” analysts including Lucas Herrmann wrote in a note to clients. Oil prices “will have to move to levels that may not only stimulate a demand improvement but also drive short-cycle US supply curtailment,” they said.
Exxon Mobil shares fell as much as 1% after the analysts cut their rating to underperform from neutral and lowered the UK’s BP Plc and Spain’s Repsol SA to neutral from outperform, citing exposure to a weaker refining outlook for all three companies. BP and Repsol shares both fell in European trading. Energy was one of the worst-performing of the 11 sectors in the S&P 500 Index on Wednesday.
Exxon had lost its last sell rating in August 2023 as Redburn Atlantic upgraded its recommendation.
Exane says Brent crude prices may need to fall to as low as $60 a barrel, given supply dynamics. Crude futures fell below $76 in London trading.
“We suspect investors’ appetite for oil sector investment will be more challenged,” Exane added.
--With assistance from Geoffrey Morgan.
(Updates with US trading moves throughout.)
©2024 Bloomberg L.P.
When WTI crude prices rose by around 5% earlier this week, energy investors thought that a breakout began. On Tuesday, the rebound stalled. Prices fell again after China offered world markets no concrete details on its mega stimulus plans.
Oil prices depend primarily on fears about escalating tensions in Israel, Lebanon, and Iran. When markets speculate that the war will not have an impact on oil supply, prices fall. Investors should watch Conoco Phillips (COP), EOG (EOG), Diamondback Energy (FANG), and Exxon Mobil (XOM). Those are the energy giants that would break out first if energy prices rise.
Investors need to brace for oil prices falling again. While volatility will rise as Middle East tensions worsen, history might repeat itself. In the medium term, oil prices usually spike no higher than around $90/bbl. At that level, demand eases, supply rises, and prices fall.
Watch gold prices, which are at all-time highs. Strong gold prices indicate that investors are taking a geopolitical hedge on risks, and they increase the chances of oil prices rising as well.
For now, watch the war developments. Israel may retaliate after Iran’s missile attacks. The U.S. may intervene to prevent the conflict from spreading.
Two energy stocks that fell the most and have value include Marathon Petroleum (MRO) and Valero Energy (VLO).
https://www.baystreet.ca/stockstowatch/19214/When-Will-the-Energy-Markets-Break-Out
Russia has raised the refining capacity volumes it expects to be idle this month by 67% compared to an earlier plan, due to scheduled maintenance at major refineries, Reuters estimates showed on Wednesday.
In October, Russia expects to have 4.0 million metric tons of refining capacity offline, per Reuters’s calculations based on figures provided by industry sources.
While that’s lower than the idle capacity in September, at 4.5 million tons, it is still higher than previously planned.
Previously postponed maintenance at Rosneft’s Novokuibyshevsk Refinery in southwestern Russia and maintenance at a unit of Lukoil’s NORSI refinery have now increased the capacity that would be offline in October.
In addition, Rosneft’s refinery in Tuapse on the Black Sea has reportedly halted crude processing since October 1 because of low refining margins, industry sources told Reuters earlier this week.
More than half of this month’s idle capacity is set to return in November, when Russia’s idle primary refining capacity is expected at 1.2 million tons, per Reuters estimates. If some of the maintenance works are extended, however, the idle capacity in November could be higher, at 1.8 million tons.
Apart from some seasonal maintenance, Russia’s refining capacity has seen this year more idle units because of Ukrainian drone attacks on Russian oil and energy infrastructure.
Energy installations have been key targets in the conflict by both sides.
Ukrainian attacks on Russian refineries and other energy infrastructure have become a fixture this year, with drones the weapon of choice for conducting the strikes.
In recent months, Russia has seen higher-than-expected maintenance and repairs at its refineries. In addition to unplanned repairs to fix damages from the drones, some refineries have been undergoing planned maintenance.
This dragged down Russia’s fuel output and exports earlier this year.
In the middle of August, the Russian government said that Moscow is extending its ban on gasoline exports from October to the end of December 2024, as it seeks to keep domestic supply stable amid seasonal demand and scheduled repairs at refineries.
By Charles Kennedy for Oilprice.com
MOSCOW (Reuters) - Russian Deputy Prime Minister Alexander Novak said on Wednesday that there are proposals from European Union partners to continue Russian gas purchases after the end of this year, but that the ball is in the court of Ukraine and the EU.
Despite the war, Russia continues to ship gas by pipeline across Ukraine to other European countries. But Ukrainian Prime Minister Denys Shmyhal said this week that Kyiv will not extend the gas transit agreement with Russia after it expires at the end of 2024.
Novak, Russia's point man for energy, said Russia was willing to continue supplying gas after the contract expires.
"We have repeatedly expressed our position that the ball is on the side of, let's say, our buying partners and, accordingly, our colleagues from Ukraine, through which transit is carried out," Novak told reporters.
"We have gas, we will supply it," he added.
Russian gas shipments to Europe via Ukraine have slowed dramatically since the start of the war, which prompted the EU to cut its dependence on Russian energy. But countries like Slovakia, Austria and the Czech Republic continue to receive Russian gas.
Asked if buyers in the EU had approached Russia about renewing the deal, Novak said: "There are specific proposals of willingness, but there is no such information about it being translated into legal actions or documents."
The EU and Ukraine have asked Azerbaijan to facilitate discussions with Russia regarding the gas transit deal, an Azerbaijani presidential adviser told Reuters in June.
Novak said on Wednesday that there were no discussions on swap deals with Azerbaijan for gas transit.
(Reporting by Olesya Astakhova; Writing by Lucy Papachristou; Editing by Mark Trevelyan)
Crude oil prices moved lower today after the U.S. Energy Information Administration reported an inventory increase of 5.8 million barrels for the week to October 4.
The change in inventory levels compared with a build of 3.9 million barrels for the previous week. It also follows an estimated inventory increase of a sizable 10.9 million barrels, as reported by the American Petroleum Institute on Tuesday.
The build estimate pressured oil prices which were already wobbly after traders’ expectations of further Chinese stimulus got betrayed by the government in Beijing, which seems to believe current stimulus is enough.
Meanwhile, the EIA reported an inventory draw in gasoline and a fall in middle distillates for the week to October 4.
Gasoline stocks shed 6.3 million barrels in the period, with production averaging 10.2 million barrels daily.
This compared with a build of 1.1 million barrels for the previous week, when production averaged 9.6 million barrels daily.
In middle distillates, inventories fell by 3.1 million barrels in the week to October 4, with production averaging 5.0 million barrels daily.
This compared with an inventory draw of 1.3 million barrels and daily production averaging 4.8 million barrels.
Earlier in the week, the EIA issued an update on oil and gas, in which it cut oil demand expectations for both the United States and the world in 2025. The authority now expects global demand to add some 1.2 million bpd next year, which is down by 300,000 bpd from earlier EIA forecasts. U.S. demand, according to the EIA, was set to rise by 100,000 bpd less than previously expected, to 20.5 million barrels daily.
It’s worth noting, however, that the EIA has been projecting weaker oil demand for much of this year as well, only to reveal in September that factual data for May and July showed a surge to multi-year seasonal highs.
Oil prices, meanwhile remained relatively stable earlier in the day, as fears of an escalation in the Middle East gave way to hopes of a ceasefire between Israel and Hezbollah, with one analyst pointing out that geopolitical news has been distorting oil markets.
“The everyday dilemma of 'Middle Eastern headlines' moving like a pendulum between 'ceasefire talks' and 'further escalation in attacks' has been distracting investors from reality ... Oil markets are twirled in sentiments of 'buying the rumor' and sidelining the real fundamentals that should matter,” Piryanka Sachdeva from Phillip Nova told Reuters.
By Irina Slav for Oilprice.com
https://oilprice.com/Energy/Crude-Oil/Oil-Slides-as-EIA-Confirms-Large-Crude-Inventory-Build.html
“Year-to-date, Guyana’s oil exports have jumped to 598 thousand barrels per day (kbpd), a 58% year-on-year increase, adding to the growth achieved in previous years. Over the past three years, the average annual growth rate has hit 76%,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
ExxonMobil first started producing from the Liza field in the Starbroek Block in late 2019. Since then, the operation in the Liza field has been expanded and production in the Payara field added. In total, three Floating Production, Storage and Offloading ships (FPSOs) are currently producing oil in the Starbroek Block.
The two FPSOs in the Liza field have year-to-date exported 371 kbpd while the one in the Payara field has exported 227 kbpd.
“Guyana so far only contributes 1.3% of crude tankers’ global cargo volumes but together with the US, Brazil and Canada the country contributes an increasing share of volumes from the Americas. Year-to-date, global crude tanker loadings increased by 163 kbpd compared with last year but loading from the four countries combined increased by 612 kbpd of which 218 kbpd were from Guyana,” says Rasmussen.
The single largest discharge port for Guyana’s oil is the Chiriqui Grande terminal in Panama, but North Europe has emerged as the largest destination area with nearly 45% of the oil heading there year-to-date. Mediterranean Europe took another 18% while the remaining 38% headed to ports in the Americas.
Guyana’s oil is mainly exported by Suezmax ships but as volumes to North Europe has increased so has the use of VLCCs. Year-to-date, 77% (458 kbpd) has loaded on Suezmax ships with VLCCs getting 23% (138 kbpd). As the VLCC voyages are longer than average, VLCCs benefit from 29% of the tonne miles that Guyana’s export offers.
The oil production has contributed to significant economic growth in Guyana. In the five years since oil production began in late 2019, the country’s economy has grown at an average annual rate of 38%. According to the U.S. Energy Information Administration, 11 billion oil-equivalent barrels of recoverable oil and natural gas has been identified and exploration is continuing. The International Monetary Fund estimates that the economy will grow at an average annual rate of 17% during the next five year.
“ExxonMobil is expected to begin production from the Yellowtail field in 2025 which, according to the International Energy Agency, should lift Guyana’s oil production to 710 kbpd. Guyana should therefore remain one of the main areas of oil supply growth outside OPEC+,” says Rasmussen.
https://www.oedigital.com/news/517892-tanker-vessels-flock-to-guyana-as-oil-exports-soar-58
Market Overview
Oil prices rose on Thursday due to increased fuel demand in Florida following Hurricane Milton’s landfall, which led to a spike in gasoline demand as around 25% of fuel stations reported supply shortages.
Additionally, geopolitical tensions in the Middle East have fueled concerns about potential supply disruptions, supporting crude prices further.
The U.S. Energy Information Administration (EIA) reported a rise in crude inventories by 5.8 million barrels, while also lowering its 2025 demand forecast.
These developments could also impact Natural Gas prices, given the rising energy demand and supply uncertainty in the region.
Natural Gas Price Forecast
Natural Gas (NG) Price Chart
Natural Gas (NG) is trading at $2.87, up 0.28%, showing a mild bullish movement. The current price is slightly above the key pivot point at $2.67, suggesting a potential breakout.
Immediate resistance is at $2.73, followed by $2.77 and $2.82. A decisive break above $2.73 could signal further upside momentum.
On the downside, immediate support lies at $2.61, with additional levels at $2.58 and $2.54 providing a cushion. The 50-day EMA, currently at $2.75, aligns with immediate resistance, indicating a key decision point.
If prices dip below $2.67, bearish sentiment may prevail, potentially pushing NG lower. Traders should watch for a close above $2.73 to confirm bullish momentum.
WTI Oil Price Forecast
WTI Price Chart
USOIL (WTI) is trading at $73.79, up 0.64%, showing a mild recovery after recent declines. The price is hovering near its 50-day Exponential Moving Average (EMA) at $73.78, which now acts as an immediate support level.
A break above the key pivot point at $74.38 could signal further gains, with immediate resistance at $75.84, followed by $77.40 and $78.44. On the downside, strong support lies at $72.65, with additional protection at $71.58 and $70.53.
The previously breached trendline around $74.38 is likely to act as resistance. If prices fail to break above $74.38, the bearish momentum could resume, pushing oil lower in the short term.
Brent Oil Price Forecast
Brent Price Chart
UKOIL (Brent Crude) is trading at $77.10, up 0.47%, showing a slight upward move but still below the key pivot point at $77.13. The price action suggests cautious sentiment, as UKOIL remains below its 50-day Exponential Moving Average (EMA) at $77.34, indicating potential bearish pressure.
Immediate resistance is seen at $78.18, followed by $79.19 and $80.25. On the downside, key support is at $76.33, with additional levels at $75.25 and $74.34.
If UKOIL breaks above the $77.13 pivot and clears the 50-day EMA, a bullish reversal could take shape. However, failing to do so could lead to further declines.
(Yicai) Oct. 10 -- China Petroleum and Chemical Corporation, better known as Sinopec, has informed its Australian partner that it would like to reduce the price of the liquefied natural gas previously agreed in their long-term supply deal.
“Origin Energy confirms that Australia Pacific LNG has received a price review notice from Sinopec in respect of its long-term LNG supply contract with Australia Pacific LNG,” Sydney-based Origin Energy announced on Oct. 4.
Australia Pacific LNG is a joint venture between US crude oil and natural gas explorer and producer ConocoPhillips, Australian electricity and natural gas retailer Origin Energy, and Sinopec. They own 47.5 percent, 27.5 percent, and 25 percent of Australia Pacific LNG, respectively.
In April 2011, Sinopec signed a supply deal with Australia Pacific LNG to purchase 4.3 million tons a year of LNG for 20 years from 2015. Later that year, the Chinese firm increased the annual procurement amount to 7.6 million tons.
The terms of the agreement are confidential, but Australia Financial Review reported in April 2011 that the contract value was about USD90 billion.
“The deal will help Sinopec diversify its natural gas supplies to fulfill China’s rapidly growing demand,” Zhang Yaocang, then deputy general manager of the Beijing-based company, said back then.
The outbreak of the Russia-Ukraine conflict in 2022 was a “watershed moment” for the commoditization of LNG, Yang Xiaoguang, executive deputy GM of Enn International Trade (Singapore), told Yicai. That year, the global natural gas trade volume fell 1 percent to 1.21 trillion cubic meters from the previous year, while LNG trade, which accounted for nearly half of the total, surged 5.1 percent.
Energy security became a priority for many countries after the Russia-Ukraine conflict broke out. According to the International Energy Agency, Asia signed 37 percent of the world’s total LNG contracts in 2022 for a total of 22 billion cubic meters per year, with China accounting for 21 percent.
In the past three years, China signed long-term LNG supply deals effective from between 2026 and 2030 for 63 million tons, Li Yao, founder and chief executive officer of Sia Energy, told Yicai.
“From 2026 to 2030, there will be a sufficient supply of natural gas in China, but the price will likely slump,” Li said. Therefore, the liquidity of LNG trade is expected to improve significantly, causing spot prices to be halved, he added.
Li believes that to better cope with cyclical challenges, enterprises can either opt for a competitive and flexible resource pool and import cheaper resources for cost optimization or strengthen the ability to quickly absorb the downstream stagflation through an integrated industrial chain layout.
Editor: Futura Costaglione
https://www.yicaiglobal.com/news/sinopec-asks-australian-partner-to-lower-lng-supply-price
In a report released on October 7, Gregory Pardy from RBC Capital maintained a Hold rating on Imperial Oil (IMO), with a price target of C$99.00. The company’s shares closed yesterday at $77.23.
According to TipRanks, Pardy is a top 100 analyst with an average return of 22.0% and a 64.20% success rate. Pardy covers the Energy sector, focusing on stocks such as Cenovus Energy, Suncor Energy, and Baytex Energy.
In addition to RBC Capital, Imperial Oil also received a Hold from J.P. Morgan’s John Royall in a report issued on October 8. However, on October 4, BMO Capital maintained a Buy rating on Imperial Oil (NYSE MKT: IMO).
IMO market cap is currently $41.32B and has a P/E ratio of 10.96.
Imperial Oil (IMO) Company Description:
Imperial Oil Ltd. engages in the provision of integrated oil business. It operates through the following business segments: Upstream, Downstream, Chemical and Corporate and Other. The Upstream segment includes the exploration and production of crude oil, natural gas, synthetic oil, and bitumen. The Downstream segment focuses on refining crude oil into petroleum products. The Chemical segment manufactures and markets hydrocarbon-based chemicals and chemical products. The Corporate and Other segment covers assets and liabilities that do not specifically relate to business segments. The company was founded on September 8, 1880 and is headquartered in Calgary, Canada.
The largest Chinese coal producer, CHN Energy Investment Group, has announced a $24 billion investment in a coal-to-petroleum facility in Hami, Xinjiang. The project, scheduled to begin production in 2027, aims to convert excess coal into petroleum products.
The plant should produce synthetic fuels like gasoline and diesel using cutting-edge liquefaction technology. According to Bloomberg's report, this would reduce China's reliance on imported oil and manage the surplus coal production.
China produced a record 4.7 billion tons of coal in 2023, while its coal consumption in electricity generation has begun to decline due to an increased focus on renewable energy.
President Xi Jinping has committed to reducing coal use starting in 2026, pushing coal producers to explore alternative uses, like petrochemical feedstocks. Such efforts continue the trend, which shows a 24% growth of coal-to-oil production from 2019 to 2023, reaching 11 million tons annually.
The Hami facility will employ both direct and indirect coal liquefaction technologies. Direct liquefaction converts coal into liquid hydrocarbons by applying heat, hydrogen, and catalysts. It is relatively simple but requires high-quality coal.
Indirect liquefaction, on the other hand, first gasifies coal into syngas, which is then transformed into liquid fuel, offering greater flexibility in the types of coal used. Both methods will be powered by renewable energy sources, such as wind and solar, which aligns with China's green energy transition efforts.
Wang Lining, director of the oil market department of the Economics and Technology Research Institute, said that this project sets a precedent for large-scale application of such technologies, per China Daily.
Such projects could shield China from oil price volatility, as it is the world's largest importer of crude oil. In 2023, its imports reached 11.3 million barrels per day, growing over 10% compared to 2022.
Still, the profitability of coal-to-oil conversions often depends on a wide gap between coal and oil prices. When oil prices fall or coal becomes more expensive, margins can shrink significantly.
China has been ramping up its coal-to-oil projects. From 2019 to 2023, coal-to-oil production capacity surged by 24%, reaching 11 million tons annually.
Analyst Suvro Sarkar from DBS maintained a Buy rating on EOG Resources and keeping the price target at $155.00.
Suvro Sarkar has given his Buy rating due to a combination of factors related to EOG Resources’ financial performance and strategic initiatives. The company has shown a strong financial performance with a second-quarter adjusted net profit surpassing estimates, driven by high production volumes and efficient cost management. Additionally, EOG Resources has raised its full-year production and free cash flow estimates, signaling robust operational execution. The introduction of the “double premium” wells strategy demonstrates the company’s focus on high-return projects, which has led to significant improvements in cash flow, investment payback times, and a reduced breakeven oil price, enhancing its financial resilience.
The analyst also acknowledges EOG’s strategic growth initiatives, such as the focus on the Ohio Utica combo play and infrastructure projects aimed at improving gas processing margins. EOG’s financial strength is further underscored by its zero gearing and its ability to deliver competitive cash returns to shareholders, as evidenced by substantial free cash flow and shareholder returns through dividends and share repurchases. The company’s robust balance sheet and cash flow projections between USD 12 billion and USD 22 billion over three years provide the flexibility for opportunistic acquisitions, contributing to the positive outlook. Despite the potential risk of fluctuating commodity prices, EOG’s high return on equity, strong balance sheet, and commitment to cash returns position it favorably for sustainable investor interest, justifying the Buy rating with a target price of USD 155.
According to TipRanks, Sarkar is ranked #2919 out of 9088 analysts.
In another report released yesterday, UBS also maintained a Buy rating on the stock with a $162.00 price target.
EOG Resources (EOG) Company Description:
Incorporated in 1985 and based in Texas, EOG Resources, Inc. is engaged in the exploration, development, production and marketing of crude oil and natural gas and natural gas liquids. It operates in the United States, Trinidad and Tobago, China and Canada.
Brazilian petrochemical producer Braskem and Argentine power company YPF Luz tapped the US bond market on Wednesday to raise a total of $1.27 billion, according to a source familiar with the deals.
São Paulo-based Braskem sold $850 million worth of new 10-year bonds. It priced the notes at par to yield 8% after opening the initial price talk earlier in the day in the mid-8% area and setting guidance at around 8.125%, plus or minus 12.5 basis points, according to the source.
Investors placed as much as $4.4 billion in orders, the source added.
Citi, Itaú BBA, Morgan Stanley, Santander and SMBC led the offering as global coordinators, working with Bank of America, BNP Paribas, Crédit Agricole, Deutsche Bank, Mizuho and Standard Chartered as joint bookrunners. Fitch and S&P Global assigned the bonds BB+ ratings.
Braskem plans to use the sale proceeds primarily to fund an ongoing tender offer for its 8.5% resettable bonds due in 2o81 and the remainder to refinance other debt maturing this year and next year, according to an investor presentation seen by LatinFinance.
CCC-RATED DEAL
YPF Luz, for its part, sold $420 million worth of new bonds maturing in 2032, pricing the 7.875% notes at 98.30 to yield 8.2%, the source said. The state-owned firm opened the deal in the mid-to-high 8% area and set guidance at around 8.375%, plus or minus 12.5 basis points, before launching, the person said.
S&P Global gave the notes a CCC rating, in line with the sovereign.
Citi, Itaú BBA, JPMorgan and Santander were joint bookrunners on the Rule 144A/Reg S offering, while Balanz Capital Valores, Santander’s local branch and Banco Galicia were local placement agents.
The company will use the proceeds to redeem bonds maturing in 2026 ahead of schedule and for general corporate purposes including working capital, according to an investor presentation.
ECOPETROL
Meanwhile, Ecopetrol’s has delayed the pricing of $1.75 billion of bonds in the US market after Colombia’s electoral council opened a campaign funding probe involving the state oil company’s CEO Ricardo Roa and the country’s leader Gustavo Petro, Bloomberg reported.
The company’s board of directors decided that Roa should remain in his post, following an extraordinary meeting on Wednesday, La República reported.
LatinFinance has corrected a story published Tuesday that said Ecopetrol had already priced the deal.
https://latinfinance.com/daily-brief/2024/10/09/braskem-ypf-luz-price-global-bonds/
A pipeline that would allow Guyana to bring natural gas produced by an Exxon Mobil-led consortium to shore has been connected to two of the project's floating production platforms, Exxon's head for Guyana was reported as saying on Wednesday 9 October 2024, according to Reuters.
The ‘Gas-to-Energy’ project by Guyana's government aims to feed a 300 MW power plant and a natural gas liquids (NGL) facility with gas produced at two Floating Production Storage and Offloading (FPSO) facilities that are part of Exxon's Stabroek block.
The 200 km (124.3 mile) pipeline could be in service by year end, Exxon Guyana Chief Alistair Routledge told local reporters, according to Newsroom Guyana.
The project, expected to help lower electricity costs and reduce emissions once completed next year, will be the first to take advantage of associated gas produced in the country.
Guyana has so far invested some US$400 million in the development.
The Exxon consortium, also integrated by China's CNOOC and US Hess temporarily halted crude and gas output at the platforms in the third quarter to allow the pipeline connection.
"Risers have now been successfully connected to the pipeline, and we have been conducting several tests and de-watering exercises to ensure everything is functioning correctly," Routledge said.
Exxon Mobil Corporation XOM, along with its joint venture partner HELLEniQ ENERGY, has completed the first exploration phase at the offshore block “Southwest of Crete.”
The Hellenic Hydrocarbons and Energy Resources Management Company (HEREMA) disclosed that the joint venture has also decided to officially proceed with the second exploration phase.
The initial phase involved collecting 3,250 km of 2D seismic data and conducting geochemical analyses. The latter stage will span three years and focus on 3D seismic data collection and assessment.
Notably, in first-quarter 2024, ExxonMobil and HELLEniQ ENERGY, in collaboration with PGS, conducted preliminary 3D geophysical surveys to map the seabed and subsoil, and the data is currently under analysis.
HEREMA CEO, Aristofanis Stefatos, said, “We are very pleased with the fact that our investors continue their exploration activities in Greece, as their continuous presence verifies our estimates that the Greek subsurface could potentially hold significant natural gas deposits. And, in turn, these deposits can drive the country’s economic growth and enhance the energy security of the wider region.”
In another development, Exxon said it has executed the largest offshore carbon dioxide (CO2) storage lease in the U.S. with the Texas General Land Office.
The over 271,000-acre site complements the onshore CO2 storage portfolio under development.
Last week, the oil giant disclosed that changes in oil prices are expected to reduce third-quarter upstream earnings Q/Q by $(1.0) billion to $(0.6) billion.
Investors can gain exposure to XOM via EA Series Trust Strive U.S. Energy ETF DRLL and Westwood Salient Enhanced Energy Income ETF WEEI.
Price Action: XOM shares are up 0.19% at $122.32 premarket at the last check Thursday.
ExxonMobil has joined forces with the New Generation Gas Gathering (NG3) project to capture and store up to 1.2 million metric tons of carbon dioxide annually from their Louisiana facility.
This brings the total amount of CO2 the oil and gas giant has agreed to store for customers up to 6.7 million tons per year.
NG3 will collect and process natural gas from eastern Texas and Louisiana, delivering it to markets along the U.S. Gulf Coast, including for liquefied natural gas (LNG) exports.
This partnership marks a significant step forward for ExxonMobil’s carbon capture and storage (CCS) technology as more industries seek to reduce their emissions.
NG3 is the first natural gas customer to utilize ExxonMobil ‘s CCS infrastructure, and the project marks Exxon’s fifth carbon capture initiative to date.
Relevant: MHI Delivers CO2 Compressor For Carbon Capture Project By ExxonMobil In Wyoming
ExxonMobil’s extensive CCS network, spanning over 1300 miles of pipelines and numerous high-quality storage sites across the US Gulf Coast, provides NG3 with a reliable solution for carbon sequestration.
Leveraging decades of experience in subsurface projects, ExxonMobil is committed to safe and efficient operations.
By collaborating with major emitters in hard-to-abate sectors, ExxonMobil aims to accelerate the energy transition through practical and effective solutions.
https://carbonherald.com/exxonmobil-partners-with-ng3-for-carbon-capture-and-storage/
Gazprom CEO Alexei Miller has issued a stark warning about the future of the European gas market. Speaking at the St. Petersburg International Gas Forum, Miller highlighted the rising volatility in gas prices and the possibility of new price shocks and supply disruptions. He attributed these risks to Europe's ongoing "deindustrialization," a result of high energy prices that make European industries less competitive compared to global counterparts.
According to Miller, gas demand in the EU and the UK dropped by 11 billion cubic meters in the first nine months of 2024. Key sectors like steel, cement, and chemicals have been hit hard, with some industries seeing a 10% production decline over the past year and a half. The situation has forced many industrial enterprises to shut down or relocate production, particularly in Germany.
Miller also noted that energy costs in Europe are 2-3 times higher than in the U.S., while gas prices are 4-5 times higher. This cost disparity is making it difficult for European companies to remain competitive on the global stage.
Looking forward, Gazprom expects global gas demand to reach 5.7 trillion cubic meters by 2050, driven by population growth and digitalization. Most of this growth will come from countries like China, India, and Russia, with demand in the Global South also rising.
For the U.S., Miller pointed out a slowdown in gas production due to depleting shale deposits and rising domestic demand. Interestingly, the U.S. is increasing gas imports from Canada, indicating that even the world's largest producer of gas is facing supply challenges.
Miller emphasized that Russia sees new opportunities in partnerships with global organizations like BRICS, which could shape the future of the gas market.
Russia’s Finance Minister Anton Siluanov recently said that Russia was moving towards reducing its share of volatile income and reducing Russia’s dependence on oil and gas.
By Julianne Geiger for Oilprice.com
Hungary has reached an agreement with Russia’s state-controlled energy giant Gazprom to increase the supply of Russian natural gas via the Turkish Stream pipeline. The deal, which is expected to deliver 6.7 billion cubic metres of gas to Hungary in 2024, signals a significant step in Hungary’s energy strategy amidst ongoing geopolitical tensions in the region.
The announcement was made by Hungary’s Minister of Foreign Affairs, Péter Szijjártó, during a gas forum held in St. Petersburg, Russia. According to Szijjártó, the Hungarian government’s primary responsibility is to ensure long-term energy security at competitive prices. This agreement, he emphasised, is crucial for the stability and affordability of energy supplies in Hungary.
On 10 October, Hungary’s state energy company, MVM, signed a memorandum with Gazprom outlining the terms of the deal. Both parties reaffirmed their commitment to maintaining and potentially increasing the supply of Russian gas. Gazprom stated that the memorandum of understanding would serve as a framework for further negotiations, which could lead to an expansion of the supply agreement in the future.
The Role of Turkish Stream in Hungary’s Energy Security
The Turkish Stream pipeline has become a cornerstone of Hungary’s energy infrastructure, particularly after Szijjártó’s assertion that it has played a critical role in the country’s energy security. The pipeline, which transports Russian gas to Southern Europe via the Black Sea and Turkey, bypasses Ukraine, offering Hungary an alternative route to ensure a steady gas supply.
Szijjártó highlighted that Hungary avoided a potential energy crisis by opting to support the Turkish Stream project, despite external pressures. He noted that the country would have been in a precarious position if it had succumbed to what he described as “friendly and allied pressure” to abandon the pipeline project. With the looming halt of Russian gas transit through Ukraine, which is set to take effect from 1 January, the importance of the Turkish Stream to Hungary has become even more pronounced.
The minister pointed out that Hungary can now import more gas via the Turkish Stream than it did through other routes in the past year, securing up to 20 million cubic metres per day. This development, he said, has significantly enhanced Hungary’s capacity to meet domestic energy demands, protecting the country from potential disruptions in gas supply.
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https://eutoday.net/hungary-and-gazprom-sign-deal-to-for-gas-supplies/
Gazprom has signed an agreement on the "Far Eastern" route of Russian gas supplies to China
Gazprom PJSC and the Chinese company CNPC signed a coordination agreement — an annex to a long-term contract for the purchase and sale of natural gas along the Far Eastern route. The document, in particular, regulates the interaction of the parties in the operation of adjacent gas pipeline systems in the implementation of future Russian gas supplies to China. This is stated in the company's message.
The state—owned oil and gas company CNPC is Gazprom's main partner in China.
In 2014, Gazprom and CNPC signed a 30-year gas purchase and sale agreement along the Eastern route (via the Power of Siberia gas pipeline) in the amount of 38 billion cubic meters of gas per year. The ceremony dedicated to the start of the first-ever pipeline deliveries of Russian gas to China took place on December 2, 2019.
In February 2022, a long-term contract for the purchase and sale of natural gas along the "Far Eastern" route was signed. After the project reaches full capacity, the volume of Russian pipeline gas supplies to China will increase by 10 billion cubic meters. In total , it will reach 48 billion cubic meters . m per year.
In November 2023, Gazprom, CNPC and the China National Pipeline Corporation (PipeChina) signed an agreement regulating the interaction of the parties on the design and construction of a cross-border section of the gas pipeline for gas supplies to China via the "Far Eastern" route.
Gazprom (INN 7736050003) is the world's largest gas company. The number of Gazprom shareholders in Russia and abroad is several hundred thousand. Over 50% of the company's shares are under the control of the Russian Federation.
Net profit attributable to Gazprom shareholders in the first half of 2024 amounted to 1.043 trillion rubles, which is more than three times higher than the result for the same period in 2023. EBITDA increased by 19% to RUB 1.459 trillion. Capital investments amounted to 1.058 trillion rubles, an increase of 11%.
DBS analyst Suvro Sarkar reiterated a Buy rating on Exxon Mobil today and set a price target of $133.00.
Suvro Sarkar’s rating is based on Exxon Mobil’s robust earnings and strategic acquisitions which position the company for continued growth. The second quarter of 2024 saw near record high earnings for the company, largely driven by its acquisition of Pioneer and strong performance from its assets in Guyana and the Permian Basin. Exxon Mobil has also reinstated a significant share buyback program, reflecting its strong financial health and commitment to returning value to shareholders.
Additionally, Exxon’s investment in carbon capture and other clean energy alternatives aligns with global emission-reduction goals and enhances its competitive position in the energy industry. The company’s low-cost operational strategy and ongoing key project developments, including a chemical expansion and new lubricants plant, are expected to drive future growth. The acquisition of Pioneer Natural Resources solidifies Exxon’s leadership in the Permian Basin, promising increased production and operational flexibility. These factors collectively underscore the Buy rating given by Sarkar, with a target price reflecting a premium valuation over its peers due to the company’s high returns and growth at scale.
In another report released on October 8, Piper Sandler also assigned a Buy rating to the stock with a $138.00 price target.
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Exxon Mobil (XOM) Company Description:
Exxon Mobil Corp. engages in the exploration, development, and distribution of oil, gas, and petroleum products. It operates through the following segments: Upstream, Downstream and Chemical. The Upstream segment produces crude oil and natural gas. The Downstream segment manufactures and trades petroleum products. The Chemical segment offers petrochemicals. The company was founded by John D. Rockefeller in 1882 and is headquartered in Irving, TX.
A growing number of foreign automakers in Korea -- Mercedes-Benz, Volkswagen and Audi among them -- are now cooperating with local authorities to improve EV safety by providing detailed information on their battery management systems in the wake of a serious electric vehicle fire in Incheon this past August.
A BMS monitors EV battery safety by tracking key factors like temperature and voltage, preventing malfunctions, and reducing the risk of fires. According to information provided by the Korea Transportation Safety Authority to Democratic Party Rep. Ahn Tae-jun, a total of six automakers will begin submitting BMS data to South Korean authorities by the end of 2024.
Domestic brand KG Mobility started in September, followed by Porsche in October. Volvo plans to begin in November, with Mercedes-Benz, Volkswagen and Audi set to join in December.
Once automakers begin sharing this information, EV owners in Korea will be able to have their vehicle’s battery condition checked at facilities affiliated with KTSA and private inspection stations. These inspections are part of the Korea Automobile Diagnostic Integrated System, a program developed by the KTSA. Regular inspections for electric vehicles are mandatory in South Korea, with cars needing to be checked every four years after they’re first registered and then every two years after that.
Hyundai and Kia were the first automakers to start sharing their BMS data with the Korean government back in June 2022, followed by Renault Korea and GM Korea just a month later. BMW joined in June 2023, and Tesla in October 2023.
Foreign automakers had previously been reluctant to share BMS data due to concerns about proprietary technology leaks. However, increased public pressure following EV fires has led to a shift. According to the KTSA, of the 94,959 electric passenger vehicles in Korea that require regular safety inspections, almost all of them -- about 99.7 percent -- are now from brands that have agreed to share their BMS data.
Two major holdouts are Stellantis Korea -- which includes brands like Peugeot and Jeep -- and Polestar Korea. Stellantis recently provided some data via the Korea Automobile Importers & Distributors Association, stating that it plans to provide the data to the KTSA as well. Polestar plans to submit data by the end of 2025.
While the KTSA and the Ministry of Land, Infrastructure, and Transport are encouraging more brands to share their BMS data voluntarily, the government has not yet mandated it.
Rep. Ahn stressed the importance of this initiative, calling BMS data “the bare minimum” for improving EV battery safety and fire prevention.
By Moon Joon-hyun (mjh@heraldcorp.com)
New Delhi: Major conglomerates, like Tata Group, Reliance Industries, Adani Group, Vedanta, Larsen & Toubro, and JSW Group are actively looking to hire expatriates and returning Indian professionals to drive their emerging ventures. Sectors like renewable energy, semiconductors, electric vehicles (EVs), green energy, hydrogen, solar power, as well as battery and cell technology are the new business areas for these companies. According to top company executives and search industry experts, these business houses are looking to expeditiously overcome a severe talent crunch locally and reinforce their ambitious expansion plans.
Talking to ET Now Navnit Singh, chairman and regional managing director of India at Korn Ferry, a global executive search and HR consulting firm said, “Many companies in areas such as batteries, EVs, semiconductors, hydrogen and green energy, are seeking to hire returning Indians and expats from countries such as Taiwan, the Philippines, Vietnam, Malaysia, the UK and the US.”
Tata Group is setting up an AI-enabled semiconductor fabrication facility in Dholera, Gujarat, in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation. According to a company official, the Mumbai-based conglomerate is actively recruiting highly experienced talent from Taiwan, including specialists in equipment and automation engineering.
Tata group’s electronics contract manufacturing business Tata Electronics has so far trained 400 employees, with more set to travel to Taiwan to learn specialised skills required for chip manufacturing.
Tata Group has set aside Rs 91,000 crore for establishing its semiconductor fabrication unit, a project expected to generate over 20,000 direct and indirect skilled jobs. The group’s broader multi-fab vision for Dholera aims to create more than 100,000 skilled job opportunities.
Adani, which aims to have 50 GW renewable power capacity by 2030, and is partnering Israel’s Tower Semiconductor to set up a semiconductor chip manufacturing plant in Taloja, Maharashtra, is hiring expats for niche roles for this, as well as in digital and technology domains, people in the know said to ET Now.
L&T Semiconductor Technologies, which opened offices in Japan, Europe and the US and bought semiconductor design startup SiliConch Systems, has also hired expat executives.
The wind energy industry is hoping to take centre stage in the country’s efforts towards a just energy transition with 1.3 gigawatts of wind projects currently in construction.
Speaking at the conclusion of the Windaba 2024 conference on Thursday, South African Wind Energy Association (SAWEA) CEO Niveshen Govender said over the past decade, wind energy has steadily established itself as a vital component of South Africa’s energy transition.
“Our industry has achieved remarkable milestones, contributing to over 3.5 gigawatts of installed capacity. (To date) the wind industry has 1.3 gigawatts of wind projects currently in construction. We have a pipeline of 53 gigawatts of wind projects under development in the country.
“The Electricity Regulation Amendment Bill (ERA) around unbundling of Eskom and regulatory reform, is laying the groundwork for a more resilient and sustainable energy mix in our country. However, we must acknowledge the challenges that persist whether this is specifically the grid constraints or more generally the structural reforms.”
He said there was still intervention required to unlock the full potential of renewable energy.
Keynote speaker, Electricity Minister Dr Kgosientsho Ramokgopa said they were revising the transmission development plan which had previously aimed to build 14 000 kilometres over 10 years.
“Brazil, India, Chile, Colombia, and Mexico have gone this route and we’re seeing that they’ve been able to roll out a significant amount of kilometres over the period 1998 to 2015 – over 100 000 kilometres of new transmission, so it has been done. We are learning from those experiences of countries that are within the same band as ours from a development perspective so that we’re able to take that as a template and then domesticate it so we know that there’s a place for the state, there’s a place for the private sector.”
The minister said that wind energy was a big part of the country’s integrated resource plan, a comprehensive articulation of the energy sources that will help meet the demand.
He said they received 4000 submissions on a review of the plan which was out for public consultation, of which 250 would be considered, as they made a “substantive contribution”.
With an ongoing transition from traditional energy sources to renewable solutions, the country had committed to ensuring that it meets its own energy demands while also preparing to assist regional neighbours like Zambia, the minister noted.
Cape Times
Nicola Daniels
The Serbian lithium project, led by Rio Tinto, was initially banned in 2022 due to widespread protests from environmentalists and local communities. Rio’s license was revoked amid the surrounding controversy. However, with legal approval in July 2023, the project’s resumption was on track, potentially reshaping Serbia’s role in the global green energy landscape.
Serbia had taken a significant step toward resuming operations at the highly debated Jadar lithium mine. The Jadar Valley, home to one of Europe’s largest lithium deposits, is crucial for the electric vehicle (EV) market, with lithium being an essential component for batteries.
President Aleksandar Vučić ardently supported the development of the mine, viewing it as a vital opportunity to boost the country’s economy. The project, with a price tag of $2.4 billion, promised thousands of jobs and significant foreign investment.
Still, despite reassurances from Rio Tinto regarding strict environmental standards, opposition groups continue to protest, warning of the ecological risks involved in lithium extraction. This has pushed the project into tremendous controversy, nearly bringing it to a halt.
SAUDI Arabia has been preparing to make a multibillion-dollar bet on hydrogen, and will launch a new company to produce the low-carbon fuel, sources said.
The kingdom’s sovereign wealth fund, chaired by de facto ruler Crown Prince Mohammed bin Salman, has created a company called Energy Solutions to finance “green hydrogen power production”, the sources noted, asking not to be identified as the information is private.
The Public Investment Fund (PIF) expects the company to invest at least US$10 billion, they added.
The outlay could grow significantly in the next few years, depending on the demand for hydrogen and its investment pipeline. Some investments will be made with state oil producer Saudi Aramco.
The newly created company is expected to be helmed by former Thyssenkrupp Uhde chief executive officer Cord Landsmann. It could be formally announced as soon as this month.
The company would be controlled and funded by the PIF – the powerful sovereign investor driving many of Saudi Arabia’s economic diversification efforts.
Spokespersons for the PIF declined to comment.
Saudi Arabia is aiming to become one of the world’s biggest producers of hydrogen – a fuel which burns without releasing carbon – as it looks to reduce its reliance on oil sales while remaining a global energy supplier.
The “green” variety of the fuel is made from just water and renewable power. It poses an attractive solution for countries aiming to reduce emissions from energy-intensive industries that cannot easily run on electricity, such as metals manufacturing and aviation.
However, green hydrogen production is enormously expensive. Its detractors point to the huge costs and time required to build infrastructure in importing countries. The fuel is also tricky to transport safely.
Few potential buyers are willing to sign long-term contracts to receive the fuel, and many planned projects have stalled as a result.
Saudi Arabia is home to one of the few large-scale green hydrogen projects in the world to start construction.
One of the US$8 billion project’s equity partners agreed to buy its full output, clearing a major hurdle for the plans.
Aramco has said it wants to invest in making blue hydrogen, produced using fossil fuels, with emissions from the process captured and stored to prevent them going into the atmosphere.
As governments and industries seek less-polluting alternatives to hydrocarbons, the world’s biggest crude exporter does not want to cede the burgeoning hydrogen business to China, Europe or Australia and lose a potentially massive source of income.
Saudi Arabia plans to provide 15 per cent of blue hydrogen production globally, in addition to investing in green hydrogen, PIF governor and Aramco chairman Yasir Al Rumayyan said in February. BLOOMBERG
BP boss Murray Auchincloss is expected to focus on ploughing new money into projects in the Middle East and the Gulf of Mexico - Aaron M. Sprecher/Bloomberg
BP has reportedly abandoned its target to cut oil and gas production by 2030 as its new chief executive scales back a switch to green energy to boost its share price.
Murray Auchincloss, who took over from Bernard Looney in January, is expected to focus on ploughing new money into projects in the Middle East and the Gulf of Mexico to boost output.
It marks a further withdrawal from green energy after BP reduced its pledge to cut oil and gas production from 40pc to 25pc, which would have meant it was still producing 2m barrels of oil a day at the end of the decade.
Shares in BP rose as much as 1.3pc following the report by Reuters.
Mr Auchincloss is under pressure from investors to boost returns amid a slump in BP’s share price, which has fallen by almost 20pc over the past year.
The BP boss has sought to distance himself from his predecessor Mr Looney, who quit last year after claims he had lied to the company’s board over relationships with colleagues.
Mr Looney had set out the most ambitious decarbonisation pledge across the energy sector in 2020, but these commitments have unwound since Mr Auchincloss took over.
A BP spokesman said: “As Murray said at the start of year ... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company.”
It emerged last month that the company was plotting a $2bn (£1.5bn) sale of its American onshore wind energy business, BP Wind Energy, which has interests in 10 onshore wind farms across seven US states, in a bid to put greater focus on its solar energy ambitions.
BP also announced it would go ahead with the development of a complex reservoir in the Gulf of Mexico more than a decade after the Deepwater Horizon disaster that killed 11 people and triggered the worst oil spill in history.
BP is currently in talks to invest in three new projects in Iraq, including one in the Majnoon field, and is considering investing in the redevelopment of fields in Kuwait, according to Reuters.
In August, BP signed an agreement with the Iraqi government to develop and explore the Kirkuk oilfield in the north of the country, which will also include building power plants and solar capacity.
London-listed rival Shell has also scaled back its energy transition strategy since chief executive Wael Sawan took charge in January, selling power and renewable businesses and scrapping projects including offshore wind, biofuels and hydrogen.
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
https://finance.yahoo.com/news/bp-abandons-oil-gas-pledge-105145062.html
COAL: The U.S. Supreme Court leaves in place a U.S. EPA mercury emissions rule requiring operators of the Colstrip coal plant in Montana to install costly pollution controls or close the facility. (Montana Free Press)
OIL & GAS:
The U.S. Supreme Court rejects the petroleum industry’s bid to block a Biden administration rule aimed at reducing oil and gas facilities’ methane emissions, but does not disclose its reasons. (Associated Press)
California regulators halt work on restarting an offshore oil pipeline that ruptured in 2015, saying the operator was working without a permit. (KEYT)
SOLAR:
A new Colorado law aims to revive the state’s lagging community solar program by requiring utilities to offer more capacity and by tweaking grid interconnection rules. (CPR)
Oregon farmers push back against a proposed solar installation on private land near Eugene, saying it would take land out of agriculture. (Daily Emerald)
The federal Bureau of Land Management seeks public input on the proposed 117 MW Sapphire solar-plus-battery storage project on private and federal land in southern California. (news release)
CLEAN ENERGY: Veterans of Alaska’s oil industry shift their focus to developing wind, solar, geothermal and tidal power projects, saying the state’s energy-friendliness will reduce siting conflicts. (Inside Climate News)
ELECTRIFICATION: A northern Nevada school district replaces diesel lawn mowers and leaf blowers with electric ones. (This is Reno)
WIND: A clean energy developer opens its wind turbine technician training center in Oregon. (OPB)
POLITICS: Indigenous advocates support Vice President Kamala Harris’s policies toward tribal nations, but worry her verve for clean energy development could endanger sacred lands. (Grist)
HYDROPOWER: Alaska Gov. Mike Dunleavy issues a plan for a contested hydropower dam that includes possibly converting it to pumped hydro storage. (Alaska Public Media)
GRID:
California’s grid operator advances a proposed transmission project in Nevada that would provide access to Idaho wind facilities over objections from some residents. (RTO Insider, subscription)
The U.S. Agriculture Department awards two Colorado organizations nearly $70 million for a 75 MW solar installation and for a utility to deploy smart grid technologies and upgrade power lines. (news release)
NUCLEAR: Ute Mountain Ute tribal members gather at the Utah capitol to call for the shutdown of the nation’s only operating uranium mill in the southeastern part of the state. (Utah News Dispatch)
TRANSITION: Navajo advocates cheer the San Juan Coal plant’s demolition in northwestern New Mexico, while other tribal members mourn the loss of jobs and tax revenues. (NPR)
ELECTRIC VEHICLES: Eight Mountain West states team up to build out an electric vehicle charging network on heavily traveled rural routes. (KSL)
https://energynews.us/newsletter/supreme-court-mercury-ruling-imperils-montana-coal-plant/
Indian miner Hindustan Zinc plans to transition to renewable energy to power its operations in the next five to seven years, Chairperson Priya Agarwal told Reuters on Tuesday.
"We still have a lot of captive thermal (power). It's not going to shut down tomorrow. It's going to go on for some time, but we're very committed to ensure that the transition happens successfully over time," Agarwal said at the FT Energy Transition Summit India in New Delhi. More than 90% of the company's emissions come from thermal energy, Agarwal said. Hindustan Zinc has a captive thermal power capacity of 514 megawatt. India is looking to lower greenhouse gas emissions and boost the share of non-fossil fuels in electricity generation. However, Prime Minister Narendra Modi's government has defended domestic reliance on coal, citing increasing energy requirements in the world's most populous country.Hindustan Zinc is majority-owned by metals-to-oil conglomerate Vedanta Ltd , which, in turn, is controlled by UK-based Vedanta Resources. The Indian government holds most of the remaining stake in Hindustan Zinc. In May, the CEO of Vedanta Ltd's aluminium business told Reuters that the firm will no longer add coal-fired capacity.
Rio Tinto announced on Wednesday that it reached an agreement to acquire American company Arcadium Lithium plc for $6.7 billion.
The mining giant will pay $5.85 per share in an all-cash transaction that has been approved by the boards of both companies. The deal is expected to close in mid-2025, subject to Arcadium shareholder and regulatory approvals.
"Acquiring Arcadium Lithium is a significant step forward in Rio Tinto's long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition. Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities and financial strength to realise the full potential of its Tier 1 portfolio," Rio Tinto CEO Jakob Stausholm stated. "This is a counter-cyclical expansion aligned with our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle."
https://breakingthenews.net/Article/Rio-Tinto-to-buy-Arcadium-Lithium-for-dollar6.7-billion/62845117
Hindustan Zinc Limited and IIT Madras have signed a Memorandum of Understanding (MoU) to jointly develop a 1 kWh electrically-rechargeable zinc-air battery prototype.
This partnership marks a significant step forward in the evolution of zinc-based battery technology, leveraging zinc’s abundant resource availability, cost-effectiveness and established safety record. While lithium-ion batteries currently dominate the market, their high cost, limited resource availability and safety concerns present major challenges that zinc-based alternatives can effectively address, says a release.
Arun Misra, CEO, Hindustan Zinc Limited, said, “Zinc, a critical metal across numerous industries, is set to play a crucial role in the global energy transition. Our metal offers a sustainable and economically viable alternative to lithium in energy storage technology. Our partnership with IIT Madras will advance research on zinc-air battery technology, that will redefine the future of energy storage. By exploring new applications of zinc in energy storage, we are committed to contributing to a greener and more sustainable future for the generations to come.”
The research team from IIT Madras, led by Aravind Kumar Chandiran, Head of Hyundai Hydrogen Innovation Hub, IIT Madras has already developed a prototype rechargeable zinc-air battery and holds three Indian patents for innovations in leak resistance, anode recharging and anode replacement design. This collaboration aims to enhance energy storage systems, with potential applications in renewable energy, data centres and telecommunications.
Viable alternative
Zinc-air batteries are emerging as a viable alternative, known for their long-duration storage capabilities, durability and potential to be a more affordable alternative to lithium-ion batteries. Compared to lithium, which is over four times more expensive, zinc offers a more affordable solution with superior performance attributes.
Hindustan Zinc, a Vedanta Group company, is the world’s second-largest integrated zinc producer and the third-largest silver producer. The company supplies to more than 40 countries and holds a market share of about 75 per cent of the primary zinc market in India, the release said.
ALMATY (AFP) – Kazakhstan votes on Sunday in a referendum on building the country’s first nuclear power station as the world’s top uranium producer looks to boost its power generation capacity.
The result, due to be announced on Monday, is expected to be in favour despite lingering resentment over massive radiation exposure as a result of Soviet-era nuclear tests.
China, France, Russia and South Korea are in the running to build the new power station, which is to be located on the shores of Lake Balkhash.
President Kassym-Jomart Tokayev, who was elected in 2019, says it will be “the biggest project in the history of independent Kazakhstan”.
The “Yes” campaign has dominated ahead of the vote in a country which still has authoritarian reflexes, despite an easing of pressure on civil society under Tokayev’s rule.
To ensure a high turnout, Kazakhs are being allowed to vote even if they are not enrolled on electoral registers and riding on buses in major cities is free for the day.
“The referendum in itself is more proof of the enormous changes in Kazakhstan over the past five years — another clear demonstration of the concept of a state that listens,” Tokayev said ahead of the vote.
Opponents of the project fear an environmental disaster in the event of any accidents at the power plant but have struggled to get their message across.
Dozens of them were arrested in the weeks before the referendum, according to local private media.
While rich in oil and rare metals and the producer of nearly half of the world’s uranium, Kazakhstan faces chronic electricity shortages.
The issue of nuclear power, however, is sensitive in Kazakhstan.
Between 1949 and 1989, the USSR carried out around 450 nuclear tests there, exposing 1.5 million people to radiation.
The power station is due to be built near the semi-abandoned village of Ulken in the Kazakh steppes.
https://borneobulletin.com.bn/kazakhs-vote-on-building-first-nuclear-power-station/
Global uranium demand is rebounding as China continues to add plants, while other nations in Europe and Asia prepare to build reactors as part of strategies to curb emissions. If it goes ahead, Zuuvch Ovoo stands to be the largest mining project in Mongolia since the development of the Oyu Tolgoi copper-gold mine led by Rio Tinto Plc, a venture that took decades to bring fully online, including an underground expansion that opened last year.
Mongolia has the possibility of becoming a “major player” in uranium, Thoumyre said at an industry convention in Nalaikh, a town near the capital, Ulaanbaatar. Zuuvch Ovoo has been in development since before 2013, when Areva SA, Orano’s forerunner, formed a joint venture with Mongolia’s nuclear company, Mon-Atom, to develop uranium resources.
The reappointment of Oyun-Erdene Luvsannamsrai as prime minister in July has boosted confidence in policy continuity from the previous administration, which agreed to negotiate with Orano over the mine a year ago. “Discussion never stopped” over terms, Thoumyre said on Thursday.
(By Terrence Edwards)
https://www.mining.com/web/orano-sees-progress-developing-uranium-mine-in-mongolia/
Posted 08:39 -- December corn is up 1/4 cent per bushel, November soybeans are down 4 3/4 cents per bushel. December KC wheat is up 1 1/4 cents per bushel, December Chicago wheat is up 2 3/4 cents per bushel and December Minneapolis wheat is down 1/2 cent. The Dow Jones Industrial Average is down 194.79 points at 42,157.96. The U.S. Dollar Index is down 0.040 at 102.48. November crude oil is up $1.16 per barrel at $75.54. Corn has moved back to unchanged, wheat is higher, while soybeans and products remain lower. The advancing harvest in the U.S. and wetter forecast for Brazil is weighing on futures. At 8:00 a.m. CDT, USDA reported two new sales of 155,000 mt (6.1 mb) of corn to Mexico for 2024-25 and 172,500 mt (6.3 mb) of soybeans to unknown destinations, also for 2024-25.
Posted 19:05 (10/06) -- December corn is down 3 cents per bushel, and November soybeans are down 7 3/4 cents per bushel. December KC wheat is down 3/4 cent per bushel, December Chicago wheat is down 1 cent per bushel and December Minneapolis wheat is down 1 1/4 cents. The Dow Jones futures are up 18 points at 42,644. The U.S. Dollar Index is up 0.010 at 102.53. November crude oil is down $0.58 per barrel at $73.80. Favorable central U.S. weather and a wetter forecast for dry soybean areas of northern Brazil are pressuring markets early Sunday night. The monsoon rains for Brazil are running six to 10 days behind schedule. An active harvest weekend occurred, and estimates are that both corn and soy harvests could reach 50% sometime this week.
Livestock
Posted 11:49 -- December live cattle are down $0.10 at $186.9, November feeder cattle are down $0.20 at $249.075, December lean hogs are up $1.10 at $77.25, December corn is up 1 cent per bushel and December soybean meal is down $6.30. The Dow Jones Industrial Average is down 261.13 points. Last week's negotiated cash cattle trade totaled 59,356 head. Of that 82% (48,748 head) were committed to the nearby delivery, while the remaining 18% (10,608 head) were committed to the deferred delivery option.
Posted 08:37 -- December live cattle are up $0.30 at $187.3, November feeder cattle are up $0.25 at $249.525, December lean hogs are down $0.18 at $75.975, December corn is steady and December soybean meal is steady. The Dow Jones Industrial Average is down 140.98 points. Last week's negotiated cash cattle trade was powerful as Southern live cattle traded $1.00 higher and Northern dressed deals were marked $2.00 higher. But it will be imperative to check today's USDA cash cattle report to see exactly how many cattle were purchased last week and to see how they were committed as that will help give perspective as to how this week's cash trade could pan out.
(c) Copyright 2024 DTN, LLC. All rights reserved.
https://www.dtnpf.com/agriculture/web/ag/news/article/2024/10/07/periodic-updates-grains-livestock-3
Grains
Posted 10:37 -- December corn is down 5 3/4 cents per bushel, November soybeans are down 19 1/4 cents per bushel. December KC wheat is down 1 3/4 cents per bushel, December Chicago wheat is down 3/4 cent per bushel and December Minneapolis wheat is down 1 cent. The Dow Jones Industrial Average is up 62.29 points at 42,016.53. The U.S. Dollar Index is up 0.080 at 102.62. November crude oil is down $3.70 per barrel at $73.44. Corn, soybeans, and soybean oil are under heavy pressure at mid-morning. The advancing harvest, a wetter outlook for Brazil and a drop of nearly $4 per barrel in spot crude oil are combining to weigh on markets. Wheat and soymeal are just modestly lower.
Posted 08:37 -- December corn is down 3 cents per bushel, November soybeans are down 14 1/2 cents per bushel. December KC wheat is down 3 3/4 cents per bushel, December Chicago wheat is down 3 1/2 cents per bushel and December Minneapolis wheat is down 2 1/2 cents. The Dow Jones Industrial Average is up 75.11 points at 42,029.35. The U.S. Dollar Index is down 0.090 at 102.45. November crude oil is down $2.18 per barrel at $74.96. USDA announced a new sale of soybeans to China for 2024-25 of 166,000 mt, or 6.1 million bushels. Grain and soy markets are under heavy pressure, led by soybeans and bean oil. Near perfect harvest weather in much of the U.S. and the apparent start of the wet season in Brazil are weighing on values.
Livestock
OMAHA (DTN) -- December live cattle are up $0.65 at $187.675, November feeder cattle are up $0.63 at $249.775, December lean hogs are up $0.30 at $77.125, December corn is down 5 3/4 cents per bushel and December soybean meal is down $2.10. The Dow Jones Industrial Average is up 73.89 points. Asking prices are now noted in the South at $188 but have yet to be established in the North. Traders are fully supporting the livestock complex heading into Tuesday's noon hour as all three markets are still trading higher. It's especially exciting to note that the spot November feeder cattle contract is currently trading above the market's 100-day moving average.
Posted 08:36 -- December live cattle are down $0.03 at $187.00, November feeder cattle are up $0.30 at $249.45, December lean hogs are up $0.23 at $77.05, December corn is down 3 cents per bushel and December soybean meal is down $1.00. The Dow Jones Industrial Average is up 92.62 points. The livestock complex is off to a mixed start on Tuesday as traders want to continue to support the contracts, but also know that with the markets trading a resistance points that fundamental support is essential. Still no business has developed in the cash cattle market and won't likely until after Wednesday at some point.
(c) Copyright 2024 DTN, LLC. All rights reserved.
https://www.dtnpf.com/agriculture/web/ag/news/article/2024/10/08/periodic-updates-grains-livestock
Grains
Posted 10:35 -- December corn is up 1/2 cent per bushel, November soybeans are up 5 1/2 cents per bushel. December KC wheat is up 1 1/4 cents per bushel, December Chicago wheat is up 1 cent per bushel and December Minneapolis wheat is up 1/4 cent. The Dow Jones Industrial Average is up 272.93 points at 42,353.30. The U.S. Dollar Index is up 0.230 at 102.78. November crude oil is down $0.46 per barrel at $73.11. Soybeans and soymeal have both recovered from early weakness, while wheat and corn markets are trading near unchanged. The EIA reported that ethanol production rose for the second straight week, rising 23,000 barrels per day to 1.038 million barrels per day. Ethanol stocks fell by 5.6% last week to 22.2 million barrels.
Posted 08:38 -- December corn is steady, November soybeans are down 4 1/2 cents per bushel. December KC wheat is up 2 3/4 cents per bushel, December Chicago wheat is up 3 cents per bushel and December Minneapolis wheat is up 3 1/2 cents. The Dow Jones Industrial Average is down 32.63 points at 42,047.74. The U.S. Dollar Index is up 0.220 at 102.76. November crude oil is down $1.41 per barrel at $72.16. The USDA announced a new sale of 126,000 mt (5 mb) of corn to unknown destinations for 2024-25. Early gains in both corn and soybeans have dissipated. Wheat remains a bit higher on various world weather issues.
Livestock
OMAHA (DTN) -- December live cattle are down $0.65 at $187.225, November feeder cattle are down $1.63 at $248.675, December lean hogs are down $1.78 at $75.4, December corn is up 1/4 cent per bushel and December soybean meal is up $0.60. The Dow Jones Industrial Average is up 366.53 points. The cash cattle market still hasn't seen any trade as feedlot managers are waiting patiently in hopes they can advance the market again this week. Asking prices are noted in the South at $188 but are still not established in the North.
Posted 08:35 -- December live cattle are up $0.03 at $187.9, November feeder cattle are up $0.33 at $250.625, December lean hogs are down $0.30 at $76.875, December corn is up 1 cent per bushel and December soybean meal is up $0.80. The Dow Jones Industrial Average is down 75.39 points. The cash cattle market still hasn't seen any bids develop and this week's trade could be delayed until Friday. Asking prices are noted in the South at $188 live, but are still not established in the North.
(c) Copyright 2024 DTN, LLC. All rights reserved.
https://www.dtnpf.com/agriculture/web/ag/news/article/2024/10/09/periodic-updates-grains-livestock
Seabridge Gold announced results from the first phase of this year's exploration drilling on its 100% owned Iskut project in BC's Golden triangle. Drilling has generated broad widths of important gold and copper and grades within a large potassic alteration system at the Snip North target. Sizeable magmatic fluid volumes were needed to account for the scale of the potassic alteration, requiring substantial energy and suggesting a large and nearby intrusive source.
The expected role of chemically reactive tuffaceous rocks supports the likelihood that metal concentrations would not have been displaced significantly from the source intrusion. Initial Drill Hole Results 2024 Program at Snip North. Drill Hole ID, Total Length (meters), From (meters), To (meters), Interval (meters), Au (g/t), Cu (g/t), Mo (ppm), SN-24-17, 1129.8, 373.0, 675.9, 302.9, 0.10, 3.0, 52, Including, 595.0, 650.0, 55.0, 1.14, 0.07, 1.0, 14, SN-24-18, 1228.0, 86.5, 564.5, 478.0, 0.49, 0.13, 1.5, 84, Including, 233.5, 282.6, 49.1, 0.83, 2.5, 2.5, 60, Including, 326.1, 419.0, 92.68, 0.25, 2.2, 186, Including, 484.0, 506.0, 22.0, 0.28, 2.2, 120, Including, 363.0, 612.0, 249.0, 0.54, 0.17, 1.6, 120, Including, 410.0, 546.0, 136.0, 0.69, 0.20, 1.7, 163.
True thickness of these intervals is not known, additional drilling results are required to attain an understanding of each interval's true width. Assay precision in all Seabridge exploration drilling is provide by the systematic insertion of certified geochemical standards, blanks and duplicate samples consistent with industry standards. The contents of this release have been approved by William Threlkeld PGeo, Senior Vice President of the company and a qualified person under NI43-101.
Seabridge holds a 100% interest in several North American gold projects. Seabridge's principal assets, the KSM project, and its Iskut project are in British Columbia, Canada's "Golden Triangle", the courageous Lake project is in Canada's Northwest Territories, the Snowstorm project in the Getchell Gold Belt of Northern Nevada and the 3 Aces project set in the Yukon Territory.
GOLD prices were little changed on Thursday (Oct 10), while traders await a key US inflation print due later in the day to gain further clarity of the Federal Reserve’s monetary policy stance.
Spot gold was nearly flat at US$2,609.72 per ounce, as at 0040 GMT, after easing for the previous six sessions. Prices scaled a record high last month.
US gold futures also held steady at US$2,626.70.
The US Consumer Price Index for September is due at 1230 GMT and Producer Price Index data on Friday.
Markets currently see an 80 per cent chance of a 25-basis-point rate reduction in November and a 20 per cent probability the Fed keeps rates on hold, according to CME’s FedWatch.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
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A “substantial majority” of Fed officials at the September meeting supported beginning an era of easier monetary policy with an outsized half-point rate cut, but agreed that further easing will be data-driven, according to minutes of the session.
San Francisco Fed Bank president Mary Daly on Wednesday said one or two more rate cuts this year are likely if the economy evolves as she expects. While, Dallas Fed Bank President Lorie Logan said she wants smaller reductions ahead, given “still real” upside risks to inflation and “meaningful uncertainties” over the economic outlook.
On the physical side, record-high gold prices dashed the Indian bullion industry’s expectations of a lucrative festival season after their hopes were boosted by a deep cut in import duty two months ago to the lowest in a decade.
Spot silver edged 0.1 per cent higher to US$30.54 per ounce. Platinum added 1.1 per cent to US$955.20, while palladium inched 0.1 per cent lower to US$1,038.75. REUTERS
The fight for management control of Korea Zinc, the world’s largest zinc smelter, has escalated into a game of chicken worth over 5 trillion won ($3.7 billion). As the bidding war heats up, its would-be controllers are at risk of falling prey to a “winner’s curse.”
On Friday, the last day of the initial tender offer period launched by private equity fund MBK Partners and Young Poong, the biggest shareholder of Korea Zinc, the coalition raised its offer to 830,000 won per share, matching the counteroffer presented by Korea Zinc Chairman Choi Yun-beom a few days before.
“The price has been raised by 10.7 percent from 750,000 won to 830,000 won. The seven-percent minimum purchase requirement has been eliminated too,” MBK announced Friday. With the raised price, MBK Partners and Young Poong could pay up to 2.5 trillion won for the Korea Zinc tender offer.
The announcement came shortly after Korea Zinc announced it would repurchase its shares at the price of 830,000 won on Oct. 2. The buyback plan, backed by US private investment firm Bain Capital, could cost up to 3.1 trillion won.
With the raised bets, shares of Korea Zinc and related companies have soared. Korea Zinc closed at 776,000 won per share on Friday, up 8.84 percent from the previous trading day. It reached a 52-week high of 791,000 won during intraday trading.
Shares of Young Poong Precision, a Korea Zinc affiliate, also hit a 52-week high of 32,850 won, gaining 25.15 percent for the day. It eventually closed at 31,850 won.
The industrial pump and chemical plant valve maker is expected to play a key role in the management dispute, as it holds a 1.85 percent stake in Korea Zinc. Both MBK-Young Poong and Korea Zinc have offered 30,000 won for shares of the company.
While both parties are ready to execute a total of over 5 trillion won to gain control of Korea Zinc, they could be exposed to the “winner’s curse,” referring to the tendency for the winner of an auction to pay more than an asset is worth.
Even if MBK wins the fight, the private equity house is likely to make a smaller profit when exiting the position, as the acquisition could cost more than expected.
The tender offer is a burden on Korea Zinc as well. It could become strapped for cash as it holds onto 2.7 trillion won in short-term borrowing, including corporate bonds and commercial paper.
With the MBK-Young Poong alliance changing the terms of the tender offer, the bid has been extended to Oct. 14. Korea Zinc’s tender offer will last until Oct. 23.
HCL Surda Mine Operations: Union Minister of State for Coal and Mines, Shri Satish Chandra Dubey inaugurated the resumption of Surda Mine operations. Minister of Water Resources Department, Higher Education and Technical Education, Government of Jharkhand, Shri Ramdas Soren, Member of Parliament from Jamshedpur, Shri Bidyut Varan Mahato, CMD, Hindustan Copper Limited (HCL) Shri Ghanshyam Sharma, Joint Secretary, Ministry of Mines, Shri Vivek Kumar Bajpai and senior officials from Central and State Government were present on the occasion.
Shri Satish Chandra Dubey in his address said that resumption of Surda Mine operation is a significant step towards making the nation self reliant in copper. Surda Mine operation will generate employment, revive the local economy and generate about Rs 100 Cr revenue per annum. HCL has plans to enhance the mining capacity of Surda mine from the current level of 0.4 mtpa to 0.9 mtpa in the next seven years. Jharkhand Cabinet has approved lease extension for the Kendadih and Rakha mines recently. Reopening of Kendadih and Rakha mines is on the cards this year which will lead to 2000 direct employment and 10,000 indirect employment among the local populace and triple the production of Indian Copper Complex.
Shri Ghanshyam Sharma, CMD, Hindustan Copper Ltd, said that resumption of Surda mine operation will provide direct employment to around 1100 and indirect employment to about 5000 among the local populace. This will also increase CSR and welfare activities in and around the neighbouring villages. A Capital investment of Rs 50 Crore will be made by HCL for mining operation during the Fiscal Year 2024-25.
https://thesamikhsya.com/business/hcl-surda-mine-operations-coal-and-mines-minister-inaugurates
In a strategic move to boost domestic production and reduce dependency on imports, Aditya Birla Group's Hindalco Industries and JSW Steel, led by Sajjan Jindal, are set to compete for two crucial copper mines in Jharkhand. Sources reveal that the auction will take place this month.
The mines, with a combined capacity of three million tonnes per annum, are owned by state-run Hindustan Copper Ltd. One of these blocks has remained closed for 20 years, while the other has never been tapped. Hindustan Copper is simultaneously working on expanding its production capabilities to 12.2 million tonnes annually, as indicated by its CMD, Ghanshyam Sharma.
This development coincides with Hindustan Copper's ongoing efforts to extend its Rakha Mining Lease, which expired in 2021, alongside securing necessary forestry clearances. The expansion projects, including the underground mine development at Malanjkhand Copper Project, are critical to sustaining and enhancing ore production.
(With inputs from agencies.)
PORTLAND, Ore. - With about 3,000 presentations scheduled over four days, the Geological Society of America annual convention offers a smorgasbord of ideas.
It's impossible to take everything in, but a sampling of some of the offerings this week include:
- Precambrian terrestrial ecosystems: Based on the fossil record, paleontologists have long assumed the continents were biological deserts prior to about 500 million years ago, when land plants first evolved. Marine life dominated before that.
"The standard version was that land was as barren as the Sahara," said Gregory Retallack with the University of Oregon, during a presentation Sunday.
That picture may need to change, however, based on new evidence for terrestrial ecosystems in the Precambrian Era, which covers the first 4 billion years of Earth's history.
Three talks at the convention, including one by Retallack, highlighted evidence for pervasive, multi-cellular ecosystems in billion-year-old soils located along the shores of Lake Superior, in northwest Scotland and in the Flinders Range in Australia. The evidence includes geochemical remains of microbial mats, trace fossils and possible fossil burrows.
- Plate tectonics and giant metal deposits: Ricardo Presnell with Utah-based Alta Exploration Consulting highlighted the apparent connection between world-class copper-gold deposits and ancient North American subduction zones.
The North American continent has built up incrementally over the past 2.7 billion years, as various micro-continents, island arcs, oceanic rocks and other geological terranes have collided along suture zones.
These sutures now serve as "mantle-tapping structures," Presnell said. They are "focused pathways" that allow metal-bearing fluids and magmas to rise to the surface from deep within the mantle.
The Jemez lineament in Arizona, for example, formed almost 1.8 billion years ago, when the Mazatzal province collided with the continental margin. Within the past 200 million years, that same suture zone served as a conduit for fluids and magmas that contained massive amounts of copper and molybdenum, together with gold and other metals.
"It's one of the largest clusters of porphyry copper-molybdenum deposits in the world," Presnell said, referring to a specific type of intrusive orebody.
https://www.lmtribune.com/northwest/plenty-of-brain-food-served-up4c1204f3/
Concerns have been raised that the prolonged dispute over the management rights of Korea Zinc between Chairman Choi Yoon-beom and MBK Partners and Youngpoong Alliance could lead to a supply chain crisis in the national key industries such as semiconductors and secondary battery materials. There was also a possibility that Korea Zinc would suffer production disruptions and leak key technologies or leave talent.
According to the non-ferrous metal industry on the 7th, Korea Zinc is responsible for 65% of sulfuric acid production, which is an essential material for semiconductor manufacturing. Last year, Korea Zinc produced 220,000 tons of semiconductor sulfuric acid, more than 1.8 times that of LS MnM (35%), the second-largest in Korea.
Sulfuric acid functions to remove foreign substances or impurities from the wafer surface during the manufacturing process. It plays an essential role in the early and late semiconductor manufacturing process.
Most of the supplies produced by Korea Zinc are believed to be digested by Samsung Electronics and SK Hynix. If the management dispute disrupts the supply of sulfuric acid, it could lead to a series of production interruptions for domestic semiconductor companies.
The core material business for secondary batteries, which Korea Zinc picked as future food, has also become unclear. Korea Zinc is building an all-in-one nickel smelter to stabilize the nickel supply chain, a key material for electric vehicle batteries, but it has become unable to focus on management issues due to the "war of some kind." Hyundai Motor Group, which is trying to secure nickel stably, was developing a "脫 China" initiative while establishing a supply chain through Korea Zinc.
"The smelting industry is a key industry that forms the basis of core industries such as semiconductors and secondary batteries, and once there is a crack, it is difficult to recover," said Choi Jang-wook, a professor at Seoul National University. "Because the technical capabilities of companies and the field experience of artisans are important factors, we cannot fully evaluate their value simply by approaching them with financial logic."
Meanwhile, competition between Chairman Choi and MBK over Korea Zinc intensifies, and related stock prices continue to rise. Youngpoong Precision rose 8.95% to 34,700 won and Korea Zinc rose 0.52% to 780,000 won on the same day. This reflects expectations that both sides will continue to raise their open prices.
[Jo Yoonhee / Reporter Park Sora]
Japan’s biggest copper supplier Pan Pacific Copper (PPC) expects its second-half supply to rise after a drop a year earlier caused by scheduled renovation work at the Hitachi Refinery in eastern Japan, a company spokesperson said.
PPC, jointly owned by JX Advanced Metals, Mitsui Mining and Smelting and Marubeni, outsources smelting and refining operations to its parent companies’ plants. It procures raw materials and sells the refined metals.
The company sees solid demand from local electronics parts and construction sectors, the spokesperson added.
Sumitomo Metal Mining (SMM) also expects a 21% rise in second-half output following a two-month maintenance shutdown at its Toyo Smelter & Refinery in western Japan between September and November last year, a company spokesperson said.
In March, the Japan Copper and Brass Association projected a 5.9% increase in domestic demand for copper products in fiscal 2025, citing an expected recovery in the automobile and chip industries that will drive demand for plates and strips, copper tubes, and brass bars.
The Japan Electric Wire & Cable Makers’ Association (JCMA) has also forecast 2% growth in domestic copper wire shipments in the current year, helped by a resurgence in the semiconductor industry and robust export demand.
Below are the production plans of base metals in metric tons for October to March by key suppliers PPC, Mitsubishi Materials, SMM, Furukawa, Dowa Holdings, Mitsui Mining and Smelting, Nittetsu Mining and Toho Zinc.
The table shows comparisons against planned or estimated production in metric tons in the first half of the 2024/25 financial year and actual output in the second half of the 2023/24 year that ended on March 31, with year-on-year percentage changes for the second half of 2024/25.
(By Yuka Obayashi)
https://www.mining.com/web/japanese-copper-smelters-h2-output-seen-rising-5-5-y-y/
The rather hopefully named Beijing “bazooka” was expected to be followed up by another stimulus blitz on Tuesday, this time from China’s National Development and Reform Commission focused more on fiscal policy, infrastructure investment and the energy transition
Traders sold off copper after Tuesday’s briefing turned into a damp squib with losses for the copper price after the run up now going beyond 7%.
Moreover, hopes of market conditions forming similar to that of May when copper hit a record high of $5.20 a pound or nearly $11,500 a tonne, are now looking less likely.
Benchmark Mineral Intelligence points out that the persistent contango on the LME throughout the recent rally added to the sense of caution over copper prices running ahead of fundamentals, with some drawing parallels with the fund-fuelled price rally in the second quarter:
“Indeed, last week’s Commitment of Traders report from the COMEX indicated a strong return of funds into the copper space, with non-commercial net positions increasing to the highest level since July, supported by a strong build in long positions for three consecutive weeks.
“As a result, the arbitrage between the LME and the COMEX once again blew up, reminiscent of the situation in Q2. However, any extreme run-up should be somewhat buffered by the higher level of stocks on the COMEX, which stood at 71kt as of last Friday, compared to just 20kt at the peak of the arbitrage blow-out in May.”
https://www.mining.com/hopes-for-repeat-of-mays-copper-price-blowout-fades/
China's Zijin Mining Group has acquired a gold mining project in Ghana for $1 billion
Zijin Mining Group Co. acquired the Akyem gold mining project in Ghana from the American mining company Newmont Corp. for $1 billion in order to increase resources to achieve production plans. This is reported in the press release of Zijin Mining.
The deal is aimed at increasing the resources of Zijin Mining by developing the Akyem deposit with reserves of 34.6 tons in one of the world's largest gold belts.
The transaction is expected to be completed in the fourth quarter, subject to regulatory approval. The start of the mine's development in the amount of 5.8 tons of gold per year is planned for 2028 with an extension of operation until 2042.
Africa has become a major investment destination for Chinese mining companies as Beijing seeks to develop ties with the resource-rich continent.
In 2024, gold prices rose sharply, reaching record highs amid investors' desire to benefit from lower interest rates in the United States and protect resources from growing geopolitical tensions in the world.
Zijin Mining is a Chinese mining and metallurgical company specializing in the extraction and processing of copper, gold, silver, zinc, lead and lithium. Zijin Mining is one of the largest companies in China. The headquarters is located in Fujian (China).
The country’s production of high-grade nickel is also forecast to grow, it added.
Global demand for the metal in 2025 was seen increasing by 7.1% from this year to 3.55 million tons, while supply was likely to climb 7.4% to 3.65 million tons, SMM said.
Supply and demand in a lower purity form of so-called Class 2 nickel is expected to be roughly balanced next year despite higher NPI supply from Indonesia, SMM executive officer Yusuke Niwa said.
“But we expect a surplus in (the almost-pure) Class 1 nickel due to output expansion by Indonesia’s new smelters,” he said.
Nickel is primarily used in the stainless steel sector, but is also a critical component in lithium-ion batteries that power electric vehicles, where demand is set to surge in the coming years.
SMM, which supplies cathode materials for the Panasonic lithium-ion batteries used in Tesla EVs, predicts that global demand for nickel used in batteries will grow to around 520,000 tons in 2025 from about 470,000 tons this year.
However, Niwa expressed caution about the outlook, noting: “The EV market environment looks quite difficult, except in China.”
“While we anticipate next year’s demand to grow by 50,000 tons from this year… there is a possibility it may fall short of that projection,” he added.
(By Yuka Obayashi; Editing by Jan Harvey)
https://www.mining.com/web/sumitomo-metal-forecasts-widening-global-nickel-supply-surplus-in-2025/
The premium for aluminium shipments to Japanese buyers for October to December was set at $175 a metric ton, up 1.7% from the prior quarter, on supply concerns amid higher premiums in Europe, four people directly involved in pricing talks said.
The figure is higher than the $172 per ton paid in July to September, and represents a third consecutive quarterly increase and the highest since the January-March quarter in 2022.
Still, it is below initial offers of $180 to $185 per ton made by global producers.
Japan is Asia's major importer of the light metal and the premiums (PREM-ALUM-JP) for primary metal shipments it agrees to pay each quarter over the London Metal Exchange cash price (CMAL0) set the benchmark for the region.
"The increase from Q3 reflected producers' worries over tighter supplies in Asia, as some metals could be diverted to Europe where premiums were higher," a source at a Japanese aluminium rolling mill said.
Meanwhile aluminium demand in Japan remained sluggish across both industries and construction sectors, with ample inventories, sources said.
Aluminium stocks at three major Japanese ports (AL-STK-JPPRT) rose 9.2% month-on-month to 327,300 metric tons by the end of August, trading house Marubeni 8002 said last month.
Quarterly pricing talks began in late August between Japanese buyers and global suppliers including Rio Tinto RIO, RIO and South32 S32.
In September, negotiations briefly widened the divide between buyers and sellers after one producer hiked its offer to $200 per ton, citing concerns that a fire at a smelter of aluminium group Press Metal in Malaysia could tighten supplies for the region.
But producers made concessions, as the fire's impact was expected to be limited and as they considered weak local demand and rising inventories, the sources said.
"Japanese companies don't purchase much metal from Press Metal, so the impact will be limited," said a source at a Japanese trading firm. Press Metal said last month that about 9% of its total smelting capacity was affected by the fire.
The sources declined to be identified because of the sensitivity of the discussions.
Private equity firm MBK Partners said Wednesday that it will not further raise the tender offer price for Korea Zinc amid intensifying competition for management control.
MBK and Young Poong recently raised their tender offer price for Korea Zinc to 830,000 won ($617) and for Young Poong Precision to 30,000 won, as they aim to gain a controlling stake in the world's top zinc smelter.Young Poong Precision holds a 1.85 percent stake in Korea Zinc."We cannot stand by as the corporate value of Korea Zinc and Young Poong Precision is damaged by additional price competition," MBK said in a statement, noting that the tender offer price already offers significant premiums for investors.
The announcement came amid the intensifying battle for control of Korea Zinc, with MBK teaming up with Young Poong and launching a public tender offer in mid-September to acquire up to a 14.61 percent stake in the smelter.
In cooperation with Young Poong, the largest shareholder of Korea Zinc, MBK launched a public tender offer on Sept. 13 to purchase shares of the smelter at 660,000 won per share.
MBK and Young Poong later raised their offer price after Korea Zinc announced it would purchase its own shares at 830,000 won per share.
The ongoing conflict marks the end of decadeslong cooperation between Young Poong and Korea Zinc, which were co-founded in 1974 by Chang Byung-hee and Choi Ki-ho.Young Poong and its supporting investors control a 33.13 percent stake, while Korea Zinc Chairman Choi Yun-beom and his supporters hold a 33.99 percent stake, according to industry sources.
Korea Zinc shares closed at 776,000 won per share on Tuesday on the main bourse.
The Korean stock market was closed on Wednesday in observance of Hangul Day, a national holiday celebrating the creation of the Korean alphabet.Yonhap
Zijin Mining acquires Newmont Ghana gold asset
China's multinational mining company Zijin Mining Group is to purchase the Akyem gold mine in Ghana from Newmont Corporation for US$1bn. US-based gold producer Newmont announced the sale as part of its asset optimisation strategy.
The deal involves Zijin's subsidiary, Gold Source International, acquiring a Newmont subsidiary which owns the Akyem project.
Chen Jinghe, Chairman of Zijin Mining Group, told Reuters: "Our analysis indicates significant potential in the project's resources and reserves under current and projected gold price conditions."
The transaction awaits regulatory approvals, with completion expected in Q4 2024. Zijin Mining has indicated openness to potential minority stake sales to Ghanaian entities who have expressed interest.
Barrick Gold Reports new DRC gold discovery
Canadian mining company Barrick Gold Corporation has identified new gold deposits near its Kibali operation in the Democratic Republic of Congo (DRC).
The discovery location, known as the ARK target, sits four kilometres from existing processing facilities, Reuters reports.
Mark Bristow, Barrick Gold's CEO, said: "These discoveries could yield a substantial orebody and extend Kibali's operational lifespan."
The Kibali mine, which initiated production in 2013, is a joint venture between Barrick Gold (45%), AngloGold Ashanti (45%) and Société Miniére de KiloMoto (10%).
Barrick has invested US$2.87bn in the operation, including local procurement initiatives. The mine utilises renewable energy, with plans to increase from 79% to 85% penetration upon completion of a new solar installation.
The operation maintains environmental commitments, including wildlife conservation efforts in partnership with Garamba National Park. Bristow added: "Our commitment extends beyond mining to environmental stewardship and community development."
(Bloomberg) -- Zambia’s government intends to keep ownership of some mining licenses that are shown to be promising by an ongoing mapping exercise and invite private investors to develop the assets alongside the state.
Africa’s second-biggest copper producer is pursuing ambitious plans to more than quadruple the metal’s output by the beginning of next decade. This increase will require companies to transform multiple exploration projects into operating mines. The government is currently funding an aerial geophysical survey to zero in on the best areas.
The state has set up a special purpose vehicle to push along investment, Mines Minister Paul Kabuswe said at a conference in the capital Lusaka on Wednesday. Some of the areas identified by the mapping “will be licensed within the SPV itself,” which will then approach partners about commercial arrangements for exploration and mining, he said.
In one possible scenario floated by the minister, the state company would have a 45% interest in a joint venture.
Subsidiaries of First Quantum Minerals Ltd. and Barrick Gold Corp. produce most of Zambia’s copper, accounting for about two-thirds of output last year, according to government data.
Without going into detail about the state’s financial participation in the proposed joint ventures, the licenses on offer “must be taken as capital,” Kabuswe had said at the same event earlier. “Our contribution as a nation is what we discovered on that tenement because we’ve already put money in through mapping.”
The mines ministry and an industry group last week said they had resolved differences over a draft law that would have potentially given the state a bigger share of new mining projects.
Other investors in Zambia’s mining sector include Bill Gates-backed KoBold Metals, Abu Dhabi’s International Resources Holding, China Nonferrous Mining Corp. and Vedanta Resources Ltd.
--With assistance from Taonga Mitimingi.
©2024 Bloomberg L.P.
Hercules Metals (TSXV: BIG) has again intersected major intervals of copper mineralization at the Leviathan porphyry copper system, which is part of the Hercules project, in Idaho.
Highlights from the drill results include:
HER-24-01: 0.44% copper, 64 ppm molybdenum over 154.87 metres from a depth of 256.37 metres, including 1.11% copper over 30.14 metres
HER-24-04: 0.33% copper, 59 ppm molybdenum over 217.84 metres from a depth of 266.49 metres, including 0.55% copper over 57.06 metres
HER-24-08: 0.47% copper, 82 ppm molybdenum over 480 metres from a depth of 242 metres, including 1.47% copper over 55 metres
The drill program, designed as a step out program to the initial discovery hole drilled in 2023, outlined a 1.6 kilometre by 1.1 kilometre oval-shaped enrichment blanket that remains open. Drilling is said to vector towards the potassic core of the system, while testing within a large untested soil anomaly.
“We are pleased with the grade and continuity returned over broad intervals in the system. The phyllic cap and hypogene enrichment blanket have expanded now to 1.6 km x 1.1 km, leading to new interpretations of the potential geometry and scale of the system. We’ve been able to work through drilling challenges faced at the start of the season and are now seeing strong production with the addition of Legacy’s RC rig. As production increases, it continues to generate new targets and vector us toward the core of the system,” commented Chris Paul, CEO of Hercules.
Drilling is said to be ongoing, with two diamond core rigs and one RC rig continuing to drill test the project. Drilling is said to be funded through to the end of 2025.
Hercules Metals last traded at $0.50 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
https://thedeepdive.ca/hercules-metals-hits-1-47-copper-over-55-metres/
“The project now boasts over 3 billion lb. of copper and nearly 7 million oz. of gold in indicated resources, making it one of the largest copper and gold porphyries in Canada not currently owned by a major,” commented Northisle’s CEO Sam Lee in a news release.
The updated resource, which integrates the Hushamu, Red Dog and Northwest Expo deposits, represents a culmination of the company’s exploration program over the past four years. The results, according to Lee, will form the basis of a new PEA that contemplates lower initial capital intensity leading to a potentially larger project and longer life of mine.
The previous PEA in 2021 only included the Red Dog and Hushamu deposits, and outlined a 22-year mine life with average annual production of 177 million lb. of CuEq over the first six years, including 112 million lb. of copper, 112,000 oz. of gold and 2.7 million lb. of molybdenum.
The PEA also presented the following project economics: C$1.1 billion in after-tax net present value (at 8% discount), 19% after-tax internal rate of return, and a payback period of 3.9 years. The project capex is estimated at C$1.4 billion due to existing infrastructure from historical mining, as the North Island project is situated adjacent and northwest of BHP Billiton’s now closed Island copper mine.
Shares of Northisle Copper and Gold surged following the resource update, up 8.5% to C$0.44 apiece by noon ET. The company’s market capitalization is estimated at C$106.2 million.
https://www.mining.com/northisle-copper-and-gold-updates-resource-ahead-of-pea-release/
Commodity Intelligence Chairman James Burdass Commented:
I would invite you to consider whether copper supply shortfalls versus expectations are random, cyclical (or as I believe) structural. Will this latest supply growth forecast be met? Let's go down copper memory lane, shall we?
(Note for completeness, minor variations as between CRU, ICSG and mining company data, this is an overall assessment).
Copper Supply Growth Overview (Recent Years)
2019:
Expectation: Copper production was forecast to rise modestly, driven by new mining projects and expansions of existing operations.
Reality: Actual production fell short of expectations due to labour strikes in major copper-producing countries like Chile and Peru, and operational disruptions at major mines.
Deviation: Lower-than-expected supply; a shortfall of approximately 2% from global forecasts.
2020:
Expectation: Copper supply was expected to grow marginally as several projects were scheduled to come online, especially in South America.
Reality: The COVID-19 pandemic caused significant disruptions, with many mines in Latin America forced to halt operations or reduce output. Production dropped significantly, with some estimates showing a 3-5% supply contraction compared to pre-pandemic expectations.
Deviation: A considerable supply shortfall compared to initial forecasts due to the pandemic’s impacts.
2021:
Expectation: Recovery from the pandemic was expected to boost copper production, with miners resuming normal operations and increasing output.
Reality: While production did increase from the lows of 2020, it was still below expectations. Ongoing COVID-related disruptions, political unrest in key producing countries (Chile, Peru), and supply chain issues constrained production.
Deviation: Copper supply grew but was around 1-2% lower than projected due to continued operational disruptions.
2022:
Expectation: Market analysts anticipated a significant rebound in copper production as several large-scale projects, including new mines and expansions, were expected to reach full capacity.
Reality: While production increased, issues such as lower ore grades at older mines, ongoing political instability in major producers, and rising energy costs prevented a full realization of supply growth.
Deviation: Around 3% lower than expected, with several large mines underperforming due to operational challenges
2023
Expectation: Analysts forecasted copper supply to rise, with investments in new projects and expansions aiming to meet the growing demand driven by the energy transition (e.g., electric vehicles and renewable energy).
Reality: Actual production fell short of expectations again, with new projects facing delays, cost overruns, and environmental protests. Additionally, global economic uncertainty, including slower growth in China, reduced demand expectations, which indirectly affected supply strategies.
Deviation: Another 2-3% below forecasted supply growth due to project delays and geopolitical factors.
The Hot Rolled Coil (HRC) market has been experiencing contrasting trends in Germany and the USA as October unfolds. In Germany, the HRC market initially faced a downturn at the start of the month, approaching its lowest point due to oversupply, weak demand from end-user sectors, and sufficient inventories. However, a significant shift occurred on October 3rd when European steel producers, including those in Germany, raised their HRC offer prices amid increasing costs. The German spot market saw a 3% increase in HRC prices during the first week of October.
This upward movement in German HRC prices is attributed to rising production costs and optimistic signals from China's recent stimulus package. However, the market remains at a turning point as consumption levels stay low. The HRC market in Germany is expected to gain more clarity in the coming weeks as public holidays conclude. Notably, imports into Europe have remained quiet due to holidays in Asia and face challenges such as trade restrictions, long lead times, and relatively high prices.
In contrast, the USA HRC market has shown a different trajectory. U.S. HRC prices experienced a slight increase by 0.4%, positioning them marginally above offshore material on a landed basis. Since late August, domestic HRC prices have gradually moved higher, supported by steady gains in the U.S. market. The latest market assessment indicates a rebound in average domestic HRC prices from a recent low in July, with a significant rise over the past ten weeks.
Currently, domestic HRC in the USA is more expensive than imported alternatives, reflecting a shift from earlier months when domestic products were cheaper. This trend continues despite a decline in domestic raw steel production, which reached its lowest levels since early last year according to the American Iron and Steel Institute (AISI).
The capacity utilization rate for U.S. mills fell to 74.1%, down from 76.9% the prior week and lower than the 74.4% recorded at the same time last year. Year-to-date production reached 66,212,000 short tons, with a capability utilization rate of 76.7%, reflecting a 1.7% decrease compared to the same period last year.
As per ChemAnalyst, the HRC market is expected to navigate a complex environment in the coming months. In Germany, the recent price increase may face challenges if consumption remains low, but trade restrictions could support domestic prices in the longer term. For the USA, the gradual rise in HRC prices might continue if domestic production remains constrained, but this could be tempered by global market dynamics. Both markets will likely be influenced by factors such as energy costs, raw material prices, and overall economic conditions. Manufacturers and buyers should remain vigilant to these evolving trends and potential shifts in supply-demand dynamics across both regions.
Tata Steel, an Indian steelmaker with assets in Europe, increased steel production in India by 5% year-on-year – to 5.27 million tons in July-September 2024 (Q2 2024/2025). This is reported by Financial Express with reference to preliminary data from the company.
Domestic supplies in the period increased by 5.8% y/y – to 5.10 million tons.
In the first half of FY2024/2025, Tata Steel India increased steel production by 5% y/y – to 10.53 million tons.
Tata Steel Netherlands produced 1.68 million tons of steel in July-September, up 41.2% year-on-year. Shipments amounted to 3.04 million tons, up 16.9% year-on-year.
Tata Steel UK in the second quarter of 2024/2025 fiscal year reduced steel production by 50% y/y – to 0.38 million tons. Shipments fell by 12.3% y/y – to 0.64 million tons. On September 30, 2024, Tata Steel shut down the last blast furnace (BF No. 4) at its British facility in Port Talbot, ending the production of pig iron and primary steel at the plant.
At the same time, in September 2024, Tata Steel India successfully commissioned the country’s largest blast furnace in Kalinganagar. It is noted that by increasing capacity at this site, the company will increase steel production in the country to 26.6 million tons per year.
In September 2024, Tata Steel’s Dutch subsidiary announced cost cuts to cope with the current deteriorating market conditions. According to the company, there is a significant overcapacity in the European market. Steel prices are low and customers are taking a wait-and-see attitude. In addition, the automotive industry is under pressure, which directly affects the steelmaker.
BHP has locked in a deal to support India’s steelmaking decarbonisation journey.
India’s largest government-owned steel producer, the Steel Authority of India Limited (SAIL), will work with BHP to lower carbon steelmaking technology pathways for the country’s blast furnace route.
Under a memorandum of understanding, the parties are already exploring a number of workstreams supporting the potential decarbonisation of SAIL’s blast furnace steel plants, commencing with an initial study to assess various strategies to reduce greenhouse gas emissions.
These workstreams will consider the role of alternate reductants for the blast furnace such as hydrogen and biochar use, with a view to also building local research and development capability to support the decarbonisation transition.
BHP chief commercial officer Rag Udd said the deployment of technology and abatements on the blast furnace is critical to progressing India’s decarbonised steel industry.
“We recognise that decarbonising this industry is a challenge that we cannot meet alone, and we must come together to leverage shared expertise and resources, to support the development of technologies and capability that could have the potential to create a real change in carbon emissions both now and in the longer term,” Udd said.
SAIL chair Shri Amarendu Prakash said mid- to long-term partnerships like SAIL’s collaboration with BHP are vital to decarbonising not only India’s steel industry, but will have implications on a global scale.
“SAIL is looking forward to this collaboration with BHP in taking a step forward towards engaging in developing sustainable ways to produce steel,” Prakash said.
“SAIL is committed to contributing towards tackling the issue of climate change through fostering an innovative future for the steel industry in India.”
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https://www.australianmining.com.au/bhp-locks-in-green-steel-deal/
India was a net importer of steel during the first half (April-September) of the fiscal year 2024-25, according to a report of the Joint Plant Committee (JPC) under the ministry of steel, on Tuesday, October 8.
India’s steel imports during the first half of the fiscal 2024-25 were provisionally estimated at 4.7 million mt, up 41 percent over the corresponding period of the previous fiscal year, while exports were recorded at 2.3 million mt, down 36 percent year on year, data from the report showed.
India had been a net exporter of steel during the April-September period of the fiscal year 2023-24, exporting 3.6 million mt and importing 3.3 million mt, according to the report.
According to the report, there is pressure from imports, especially from China and South Korea. But on a sequential or month-on-month basis, the rate of growth of imports is manageable as it is in low single-digit numbers. On the positive side, there have been substantial improvement in exports sequentially. Some firming up of prices in China is being seen, which is a positive if it plays out in the long run.
In September this year, finished steel imports totaled around 1 million mt, up 78 percent compared to the corresponding month of the previous year, but almost the same as in August 2024.
Exports in September this year were recorded at 0.4 million mt, up 16 percent over August, but eight percent lower than in September 2023, the report said.
Material shortages may occur if demand and consumption improve
Potential EU anti-dumping duties on hot-rolled steel plates from four countries – Japan, Vietnam, Egypt and India – could lead to a significant shortage in the domestic market. This is stated in an analytical note by the Italian steel distributors’ association Assofermet, Kallanish reports.
Paolo Sangoi, President of the Association’s distribution segment, warns that the competitiveness of Italian buyers and service centers is affected by the restriction on the import of hot-rolled coils from third countries.
The market is currently experiencing stagnant consumption and low prices for these products. However, Paolo Sangoi points to a possible significant shortage if demand increases and consumption improves, potentially resembling the situation in 2021 and 2022. If consumption recovers and there are no imports, the shortages seen in the past could reappear, causing problems for buyers. For now, EU steel producers are open to negotiations.
According to Assofermet, a 15 percent restriction on imports of hot-rolled steel plates to the EU has already pushed 1.6 million tons of steel off the market for European buyers.
According to the association, the higher costs that importers will have to bear will be passed on to end users, manufacturers of components and finished steel products, which will affect their level of competitiveness in international markets.
As for the forecasts, Assofermet does not expect consumption to recover this year, but the situation may improve in the first quarter of 2025. Prices need to change direction, as both producers and buyers of hot-rolled plates need to increase them along the entire value chain. However, according to Paolo Sangoi, this cannot be achieved without a commitment to reduce production volumes.
In August 2024, the European Commission announced the launch of an anti-dumping investigation into imports of certain hot-rolled steel products made of iron, unalloyed or other alloys from Egypt, India, Japan and Vietnam. The complaint was filed on June 24 by the European Steel Association (EUROFER).
Earlier, it was expected that the EU’s anti-dumping investigation against four steel exporters could affect more than half of the bloc’s hot-rolled coil imports. In January-May of this year, these countries accounted for about 51% of HRC imports, totaling almost 4.3 million tons in the period.
Recent increases in Chinese steel prices have offered a potential reprieve to Indian steelmakers, who have been grappling with price pressure. According to a report from Axis Securities, Chinese hot-rolled coil (HRC) prices rose in September 2024, altering the competitive landscape by turning the import parity premium of domestic HRC prices into a discount.
In detail, the domestic HRC prices were previously about 7-8% higher than their Chinese counterparts as of September 2024. This premium has been reversed, now reflecting a 3% discount. HRC refers to steel rolled into coils at high temperatures, widely used in the construction, automotive, and manufacturing sectors.
The report suggests this shift could help stabilize domestic prices, enabling Indian steelmakers to compete more effectively with imports. Meanwhile, Indian authorities have launched an anti-dumping investigation against imports of Cold Rolled Non-Oriented Electrical Steel from China, as domestic complainants allege these are priced unfairly, harming the Indian industry.
Despite these developments, the overall impact of China's economic stimulus on steel price margins may remain limited. Although higher HRC prices are positive, increasing costs of raw materials like iron ore and coal could counterbalance profit gains, maintaining a check on profit margins.
(With inputs from agencies.)
Prices will increase for all types of long rolled products, including rebar, beam and wire rod
Global steel producer ArcelorMittal has announced an increase in the prices of rolled products across Europe. This was reported by Kallanish with reference to sources in the market.
Prices will increase by €40/t for all types of long-rolled products, including rebar, beam and wire rod. The decision was made due to the instability of the market and the rise in prices for raw materials around the world. Companies throughout the supply chain are at risk of financial instability, and higher prices should restore some profitability.
The current increase is effective immediately for all new bookings.
Global rebar prices in September did not show a clearly defined trend. In the USA and the EU, the dynamics were negative, but in Turkey and China, growth was observed, which is not considered sustainable.
In particular, on the European market, fittings quotations remained mostly stable in August-September. In Northern Europe, during September 1-20, prices remained at the level of €610-630/t Ex-Works, and in Italy – decreased by 3.4%, to €550-560/t Ex-Works, mainly following the price trend of junk.
As GMK Center reported, ArcelorMittal recently announced an increase in hot-rolled coil prices in Europe by €40/t, up to €590/t. At the same time, NLMK La Louviere increased prices by around €25/t. Service centers have also reacted to the increase in prices from metallurgists, in particular, one of them offers g/k coil at the level of around €605/t for small tonnages.
Steel mills resorted to a sharp price increase following the recent announcement of China’s economic stimulus and rising prices for metallurgical raw materials.
https://gmk.center/en/news/arcelormittal-increases-long-steel-prices-in-europe-by-e40-t/
European steel hot-rolled coil producers are looking to achieve higher prices for deliveries at the end of the fourth quarter of this year and in the first quarter of 2025, but buyers remain cautious because real demand is still low, sources told Fastmarkets on Tuesday October 8.
This week, European suppliers have been increasing their offer prices for HRC, citing mounting costs.
“The lowest offers are no longer [available] but buyers are still hesitating,” a buyer source in Europe said. “[There is] no change in real demand. Only an apparent demand improvement could support the price rise that is being asked [for] – if buyers need to restock before the end of 2024.”
Offer prices for November-December delivery HRC were heard at €560-570 ($614-625) per tonne ex-works. And for larger tonnages, prices of €540-550 per tonne exw were still possible, sources said.
Buyer sources estimated tradable values at €530-540 per tonne exw, but mill sources said the lower end of that range was no longer acceptable.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €545.38 per tonne on Tuesday, up by €7.30 per tonne from €538.08 per tonne on October 7.
The index was up by €8.39 per tonne week on week but down by €35.37 per tonne month on month.
In Southern Europe, meanwhile. Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €540.00 per tonne on Tuesday, unchanged from October 7.
The Italian index was up by €7.00 per tonne week on week, but down by €40.24 per tonne month on month.
Market participants reported transactions for November-delivery HRC in Italy at €540-555 per tonne delivered (€530-545 per tonne ex-works).
But after ArcelorMittal’s move last week to increase HRC prices in Europe by €40 per tonne, Italian suppliers were also mulling a price rise, Fastmarkets heard.
“For December delivery, European and Italian mills want a €20-40 per tonne price rise as a first step,” a buyer in Italy said.
Sources also reported high offers for imported HRC in the week started October 7.
New offers from Asia of HRC for November shipment to Italy were reported at €550-560 per tonne CFR, compared with €520-540 per tonne CFR in late September.
But sources told Fastmarkets that this price was totally unworkable for the European market. Buyer price ideas for Asia-origin coil were no higher than €500-520 per tonne CFR, they added, but no such offers were available in the market.
Published by: Julia Bolotova
fastmarkets.com
https://eurometal.net/steel-hrc-prices-in-europe-still-below-mill-target-offers/
The export of this raw material from the EU in January-June amounted to 7.36 million tons
In January-June 2024, the EU increased the consumption of scrap by 8.8% year-on-year – up to 43.61 million tons. This is evidenced by the data of the International Association of Recyclers of Secondary Raw Materials – BIR.
Export of scrap from EU countries in the first half of the year decreased by 18.7% y/y – to 7.36 million tons.
According to the BIR, September of this year brought an unexpectedly sharp drop in scrap prices in Germany, as some consumers reduced production or implemented reduced operations in response to large inventories of semi-finished and finished products. Feedback from Scandinavia suggests that metalworking plants in Europe are struggling with declining sales and increased competition, particularly from China.
China has retained its position as the world’s largest consumer of scrap metal. In January-June of the current year, the consumption of this raw material in the country amounted to 122.54 million tons (+5.4% y/y).
The consumption of scrap in Turkey in this period increased by 13.1% year-on-year – to 15.71 million tons, in India by 14% year-on-year – to 17.8 million tons. In the United States, this indicator in the first half of the year fell by 1.8% compared to the same period last year – to 27.6 million tons.
According to the BIR, purchases of scrap by a number of key consumer countries in Asia were undermined by a sharp increase in Chinese semi-finished and rolled exports, as well as the offer of cheap Russian billet,
As GMK Center reported earlier, the global consumption of scrap by steel enterprises in 2023 decreased by 12% compared to 2022 – to 411.28 million tons. The indicator contrasted with a slight increase in global steel production – by 0.2%, to 1.155 billion tons.
Last year, the European Union reduced the consumption of scrap by 5.7% y/y – to 74.8 million tons, Turkey – by 3.9% y/y, to 29 million tons, Japan – by 2.9% y/y, to 31.8 million tons.
https://gmk.center/en/news/eu-increased-scrap-consumption-by-8-8-y-y-in-h1-bir/
Mexico's finished steel product exports to the world totaled 223,000 metric tons (mt) in August, down 13.2 percent year-over-year. It is the lowest volume in the past 46 months (since November 2020), according to data from the Mexican Chamber of the Iron and Steel Industry (Canacero) reviewed by SteelOrbis.
In August, the impact on exports was driven by plummeting steel plate (coil and sheet) volumes by 75 percent, hot rolled coil (HRC) decreased by 41 percent, cold rolled steel (CRC) registered a reduction of more than 36 percent and galvanized sheet (HDG) exports decreased by more than 23 percent, year-over-year.
On the import side, volume totaled 1.08 million mt, down 10.3 percent year-over-year in August. This is the fourth consecutive annual decline.
Mexico's steel trade flow with the world totaled 1.3 million mt, down 10.8 percent from August of last year. Mexico is a deficit industry, now with a deficit of 858,000 mt, down 9.5 percent.
In the cumulative period to August, imports of finished steel products totaled 8.59 million mt, up 1.3 percent from the January-August period of last year. Exports decreased 11.0 percent to 2.05 million mt.
Posted on 10 Oct 2024
Chinese HRC prices seen rebounding in Oct
Improved sentiment in China's steel market could see demand for carbon steel hot-rolled coils (HRC) rebound this month and drive up prices of the flat product in tandem, Mysteel's latest monthly report on the commodity suggests.
HRC prices had steadily decreased for most of September, undermining the profitability of the flat rolled makers and causing them to rein-in production, as reported. The improvement in China's steel market overall in late September finally helped the coil makers recoup some of their earlier losses.
In September, China's spot price of Q235B 4.75mm HRC in Shanghai under Mysteel's assessment had declined by 3.9% on month to average Yuan 3,126/tonne ($442.7/t) including the VAT, the lowest monthly average in seven years.
Entering October, the improved sentiment will buoy the country's steel market including that for HRC, Mysteel's report notes.
In late September, the central government had announced a series of stimulus policies aimed at boosting economic growth, which bolstered market confidence including that for steel, as reported.
Meanwhile, HRC demand is likely to enjoy a recovery this month in both the domestic market and overseas, the report suggests.
Domestically, the home appliance industry – one of the major consumers of hot coils – may perform relatively strongly in October and thus give a fillip to HRC usage.
This month, the total scheduled production of China's three most popular home appliances – air-conditioners, refrigerators and washing machines – is predicted to rise by 10.1% on month to 28.63 million units, according to ChinaIOL.com, a leading domestic information provider for the home appliance and refrigeration industries.
Meanwhile, HRC use in the machinery sector is also expected to pick up moderately, as many construction companies in North China will be rushing to finish projects by year-end before the winter cold arrives, giving a lift to sales of yellow goods, Mysteel's report indicates.
This month, China's apparent consumption of hot coils may grow by 1.6% from September to average 3.18 million tonnes per week, Mysteel's report estimates.
In overseas developments involving for hot rolled coils, Vietnam – a major consumer of Chinese HRC – has opened a window for a possible rise in Chinese exports this month. Hanoi in mid-July had launched an anti-dumping (AD) investigation into Chinese HRC, as reported, and has recently extended the deadline for the submission of documents by the targeted Chinese mills to October 16.
This might see more Chinese HRC exported to Vietnam ahead of the possible imposition of AD tariffs, the report suggests.
As for supply, the increase in prices and profitability of hot coils this month could see a slight recovery in production, the report indicates, saying that average HRC output in October may rise 1.7% from September to reach 3.08 million tonnes per week.
Source:Mysteel Global
Vietnam steel major Hoa Phat posts 23% revenue growth in Jan-Sept
By Quang Minh Thu, October 10, 2024 | 11:19 am GMT+7
Hoa Phat Group, a leading construction steel producer in Vietnam, recorded revenues of VND105 trillion ($4.22 billion) in the first three quarters of this year, up 23% year-on-year.
In Q3, the group earned estimated revenues of VND34 trillion ($1.37 billion), representing an annualized rise of 19%, it said in a statement, without giving earnings estimates.
Hoa Phat (HoSE: HPG) said both the domestic and international steel markets were facing headwinds in Q3, with prices trending down. Its steel sales volume dropped 7% quarter-on-quarter to over 2 million tons.
The company's construction and high-quality steel production decreased 14% quarter-on-quarter to 1.1 million tons in Q3. The company still managed to keep the largest share in the domestic construction steel market, at 38%. Its hot-rolled coil (HRC) output stayed unchanged at 738,000 tons versus Q2.
Between January and September, Hoa Phat produced 6.4 million tons of raw steel, up 34% year-on-year. The sales volume rose 32% to 6.1 million tons, excluding steel pipes and galvanized steel.
In Jan-Sept, steel pipe production increased 3% year-on-year to 503,000 tons, and galvanized steel output jumped 43% to 344,000 tons, exceeding 329,000 tons for the whole of 2023.
The company said it recorded positive performances in other businesses such as chicken egg and pork production, household appliances, and industrial park development.
It noted that resources were being prioritized for the construction of the Hoa Phat Dung Quat 2 steel complex, with an annual output of 5.6 million tons of HRC. The company expects to churn out the first HRC products in a test run by the end of this year.
In another announcement, Hoa Phat Group and its subsidiaries paid VND10 trillion ($402.2 million) to state coffers in Jan-Sep, up 65% year-on-year, and the tally may amount to VND15 trillion this year.
https://theinvestor.vn/vietnam-steel-major-hoa-phat-posts-23-revenue-growth-in-jan-sept-d12734.html
The negative trend in producer prices for steel complexes in Mexico continues. In September, prices fell 0.4 percent year-over-year, marking 24 consecutive months of decline. The most notable drop in the price of rebar was 6.6 percent in the same period, according to an analysis by SteelOrbis of data from the national statistics agency Inegi.
In September, the Producer Price Index (PPI) excluding oil and with services increased 5.5 percent year-over-year. Prices with oil and with services increased 5.1 percent. Annual general inflation (Consumer Price Index) was 4.6 percent in the same month.
Of the three products that make up the "steel complexes," the most pronounced reduction was in the price of rebar, with a 6.6 percent year-over-year decrease and a 1.8 percent decrease compared to the previous month. In an annual comparison, the price of rebar has been declining for 24 consecutive months.
"Steel sheet" (without a breakdown of sheet type) decreased 0.3 percent compared to the previous year, the sixth consecutive annual decrease.
In contrast, the price of steel slabs registered an increase in prices for the second consecutive month. In September, it increased by 4.6 percent. For the second consecutive time, the negative trend of the last 13 months (since July 2023) is broken.
Beyond the concept of steel complexes, other annual reductions in steel products in prices were steel profiles with 8.9 percent, steel bars with 3.3 percent, wire rod with 2.9 percent, iron and steel wires with 2.5 percent, non-powered hand tools with 2.0 percent, the manufacture of metal structures with 1.3 percent, galvanized sheet metal with 0.7 percent and primary slabs and ferroalloys with a decrease of 0.3 percent.
In contrast, price increases were registered in wire products with an annual increase of 4.5 percent, enameled metal parts increased by 5.9 percent, in the manufacture of light gauge metal containers it increased by 6.2 percent and sheet metal cutting and bending increased by 7.0 percent.
Iron ore futures in Singapore fell more than 5% after rising by nearly that amount ahead of the briefing. Copper dropped to its lowest in two weeks in a sharp sell-off across base metals, while investor disappointment was reflected across wider Chinese markets.
“There had been talk that the NDRC may announce trillions of yuan in stimulus, but it came out with nothing at all,” said Hang Jiang, head of trading at Yonggang Resources Co. in Shanghai.
Iron ore futures are still up almost a fifth from late-September on optimism that Beijing’s earlier moves to boost the economy would end a period of deep gloom for China’s steel industry. Demand for the steelmaking ingredient has suffered amid a years-long property crisis.
Investors are still looking for more concrete signs that the government’s pledges will feed through to real economic activity. The NDRC officials said they would speed up spending, but their comments on investment and support for low-income groups were largely reiterations of previous pledges.
“The stimulus from China so far is not going to yield a significant turnaround for base metals,” Yonggang’s Jiang said. “We need to see stimulus feed into a real pickup in consumption before we can see big price rallies.”
Not enough
Copper and other metals have now wiped out most of their gains since Beijing rolled out a blitz of policy measures in the days before China’s Golden Week break. Tuesday morning’s briefing by the NDRC was announced over the weekend, triggering a wave of speculation about additional pro-growth moves.
Investors are “disappointed” after putting such high expectations on the NDRC briefing, said Jia Zheng, head of trading at Shanghai Soochow Jiuying Investment Co. Sustaining recent price gains requires more fund inflows, she said.
Iron ore fell 5.1% to $105.10 a ton on the Singapore Exchange as of 11:49 a.m. in London. Copper dropped 1.7% to $9,766 a ton on the London Metal Exchange, heading for its lowest close since Sept. 23. Aluminum, zinc, nickel, lead and tin all lost more than 2%.
Base metals should get support from the “material shift in China policy” since last month, Citigroup Inc. said in a note ahead of the NDRC briefing. But other global risks — from the US election to weak European growth and Middle East conflicts — would likely keep a lid on prices beyond the near term, they said.
https://www.mining.com/web/iron-ore-copper-prices-slump-as-china-fails-to-deliver-fresh-stimulus/
SINGAPORE, Oct 9 (Reuters) -Prices of Dalian iron ore futures languished on Wednesday, as an absence of further fiscal measures following China's outsized stimulus package disappointed investors and saw the market's previously stimulus-driven frenzy fade.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade down 3.6% at 777.5 yuan ($110.12) a metric ton, after tumbling more than 4% earlier in the session.
The benchmark November iron ore SZZFX4 on the Singapore Exchange, however, edged 0.2% higher to $105.2 a ton.
Metals futures slumped after Beijing failed to deliver any meaningful stimulus measures to boost economic growth, ANZ analysts said in a note.
A press briefing by China's top economic planner was expected to provide details of fiscal stimulus measures the Politburo called for earlier, but instead largely reiterated plans to boost investment, ANZ said.
"Prices retraced on what was clearly overhyped expectations for Chinese stimulus," said Westpac analysts.
China said on Tuesday it was "fully confident" of achieving its full-year growth target, but refrained from introducing stronger fiscal steps, disappointing investors who had banked on more policy support to get the economy back on track.
"We have seen plenty of property support measures this year but so far they have failed to have a meaningful impact on metals demand," ING analysts said.
"We think the recent stimulus measures still lack detail, and we struggle to find an additional demand growth driver for industrial metals in the measures announced so far."
The market needs to see signs of sustainable Chinese recovery and economic growth before industrial metals can make long-term gains, ING said.
Other steelmaking ingredients on the DCE extended declines, with coking coal DJMcv1 and coke DCJcv1 down 4.78% and 4.44%, respectively. Coking coal had plunged over 5% earlier in the session.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Hot-rolled coil SHHCcv1 dropped 3.5%, rebar SRBcv1 shed nearly 3.3%, stainless steel SHSScv1 declined almost 1.3% and wire rod SWRcv1 was flat.
($1 = 7.0603 Chinese yuan)
Reporting by Gabrielle Ng; Editing by Sherry Jacob-Phillips
India imported 176 million tons of thermal coal in 2023, with 26.2 million tons coming from Russia.
Russia is looking to boost its coal exports to India as the world’s most populous country struggles to meet surging power demand.
China remains the biggest buyer of Russian coal but Moscow has said India may overtake it by the start of the next decade as Beijing plans cutbacks on coal usage for power generation.
India has increasingly relied on coal to address record power demand, with the rise in coal-fired power output earlier this year outpacing renewable energy growth for the first time since at least 2019.
Its coal production in the last fiscal year to March 31 rose to a record 997.828 million metric tons, a 12% rise from a year ago. More than 75% of India’s power generation was from coal in 2023.
India imported 176 million tons of thermal coal in 2023, driven mainly by power plants. Russian exports to India reached 26.2 million tons last year, up from 20 million tons in 2022, according to Russia’s energy ministry.
Russia is already the largest supplier of crude oil to India thanks to diversification of trade ties away from Europe, once Moscow’s key business partner, due to a severe political standoff with the West over the conflict in Ukraine.
“Russian coal-producing enterprises have significant resources and are interested in expanding its presence in the fast-growing Indian market,” Russian Deputy Prime Minister Alexander Novak said, according to a transcript of his remarks released by his office. He made the comments at a meeting with reporters.
Despite close political and business ties, India is wary of sanctions against Russia. It said last month that the country would not buy liquefied natural gas (LNG) produced from Russia’s Arctic LNG 2 project, which is sanctioned by Western countries.
Reuters with additional editing by Sean O’Meara.
https://www.asiafinancial.com/russia-looks-to-boost-coal-exports-to-power-hungry-india
To increase the usage of available raw materials , the Ministry of Steel has directed integrated steel players to make use of iron ore fines in steel making after its beneficiation. As per sources, the ministry has also suggested that players look at options like acquiring coking coal mines abroad. This is aimed at increasing the availability of raw materials at competitive prices, they said."It has been conveyed to them that iron reserves are limited in the country and to preserve that, players must also use low grade ore through beneficiation process. They can also look for coking coal mines outside India," the sources said.Iron ore and coking coal are the two key raw materials used for manufacturing steel through blast furnace route. While iron ore is available in abundance, for coking coal, India remains heavily dependent on imports. Major players use only high grade ore (lumps), with 65 per cent and above iron content, to make steel through BF (blast furnace). Fines are low grade ore having iron content or 64 per cent or less.Beneficiation of low grade ore adds to the overall cost of production.
