The seaborne iron ore price hit a five-year high of over $100/dry mt Friday on reduced supply from big miners and low inventories at steel mills.
S&P Global Platts assessed the 62% Fe Iron Ore Index at $100.40/dmt CFR North China Friday, up $2.40 from Thursday, and up $28.05, or 38.8%, so far this year.
Brazilian mining company Vale estimates iron ore sales volume between 307 million mt and 332 million mt for 2019 depending on operations at its Brucutu mining complex following the collapse of the Laranjeiras tailings dam on March 18. The miner shipped 55.41 million mt iron ore fines in the second quarter, down 22.2% from Q1 as a result of the dam collapse.
Rio Tinto said on April 1 that its iron ore production in 2019 would be cut by about 14 million mt due to cyclone hit Western Australia, and BHP cut iron ore supply guidance by 6 million-8 million mt in 2019.
Steel mills were not prepared for a cut in iron ore supply, traders said.
"Steel mills have been keeping iron ore inventories low and only buying hand-to-mouth from Chinese ports to accommodate steel production," a Shanghai-based trader said.
Dockside iron ore inventories fell by over 20 million mt so far this year on less supply and strong demand from end-users.
China's crude steel output in April hit a record high of 85.03 million mt, up 12.7% on the year, according to the National Bureau of Statistics.
"That says iron ore is in demand. The use of scrap is likely to go down this year on less strict environmental controls and lower steel margins," a Chinese trader said.
Market participants said that seaborne iron ore supply is tight, and spot offers for June and July loading cargoes are limited.
Although China increased domestic iron ore production this year, it is still far from meeting end-users' needs.
A shortage of Brazilian's iron ore fines meant low-alumina cargoes regaining popularity in Q2.
Platts assessed alumina differentials of 1%-2.5% at $6/dmt Friday, compared with the lowest so far in 2019 of $1.50/dmt on January 22.
China Rare Earths.
China MinMetals.
Rare earth stocks are soaring in China for a second day after
one of the country’s major rare earths facilities and talks of trade retaliation emerged.
Companies related to rare-earth elements surged on Tuesday, with many extending gains from the previous session, after Xi’s visit brought the industry into the spotlight and highlighted its strategic importance with the US.
Rare earths are a group of 17 elements, many of which are crucial to the production of hi-tech products, with magnets made from the minerals used in electric cars, earphones and hard drives in computers, among other things.
China accounts for 90 per cent of global rare earths production, with its exports making up around 80 per cent of global demand. The minerals are among the few items excluded from the US’ plans to put tariffs on almost all remaining goods exported to the US.
Infographics: Anatomy of an iPhone - what’s in it and where the parts come from
On Monday, Xi paid a visit to JL Mag Rare-Earth, a mining and processing facility in Ganzhou city, southeastern Jiangxi province, according to state news agency Xinhua. On his first domestic trip since the escalation of the US-China trade war this month, Xi was accompanied by vice-premier Liu He, who has been the top negotiator with Washington amid the ongoing dispute.
Saudi Arabian Oil Co, known as Aramco, has agreed to buy U.S. liquefied natural gas (LNG) from San Diego-based Sempra Energy’s Port Arthur project in Texas, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
The terms of the deal could not be determined and it was not clear if Aramco would also take an equity stake in the project, WSJ said.
It is unclear if the LNG will be used to power Saudi Arabia’s local economy, or sold to international buyers, according to the report.
Aramco and Sempra did not immediately respond to Reuters’ requests for comment on the WSJ report.
Aramco had been pushing its conventional and unconventional gas exploration and production program to feed its fast growing industries, as the company planned to increase gas output and become an exporter.
In the recent months, Aramco has been looking at gas assets in Russia, Australia and Africa.
2019-05-23 04:37:15.721 GMT
By Bloomberg News
(Bloomberg) -- China and the U.S. may be stuck in a cycle
of "fighting and talking" until 2035, according to a senior
Chinese government researcher, who said relations will get worse
before they get better.
For the next few years both sides will test each other’s
strategic intentions and be prone to misjudgments which make
trade talks difficult, according to Zhang Yansheng, chief
researcher at the China Center for International Economic
Exchanges. Zhang previously worked at the National Development
and Reform Commission, the country’s top economic planner, and
is now on their academic committee.
The most difficult period will be 2021 to 2025 and there
could be friction in the areas of economy, trade, technology,
and finance, Zhang said at a briefing on Wednesday organized by
the government. From 2026 to 2035, China and the U.S. may head
toward "rational cooperation" from "irrational confrontation,"
according to Zhang.
China uses a series of five-year plans to organize its
economic development and 2035 marks the year Beijing seeks to
achieve "socialist modernization," when China will join the
ranks of world’s most innovative countries, according a
blueprint laid out by President Xi Jinping in 2017. Prospects
for a quick trade deal with the U.S. have dimmed after talks
stalled earlier this month and President Donald Trump threatens
to hobble Chinese technology firms.
Read More: As New Cold War Looms, China Struggles to Grasp
Trump’s End Game
The breakdown of the current negotiations was caused by the
U.S. demanding that China make sweeping changes immediately on
the trade balance, structural reform and legal amendments, Zhang
said. That was too much too quickly, he said.
High Bar
"None of these three topics can be realized in the short
term," said Zhang, adding that the enforcement system required
by the U.S. was beyond China’s own capabilities and the demanded
legal changes were "too high a technical bar." It takes time for
China to improve its capacities nationwide, he said, citing the
vast gap between the country’s metropolises and landlocked poor
regions.
The U.S. put forward a demanding package, told China to do
it in one step, and threatened punishment if it didn’t happen,
Zhang said. For the Chinese, "this sounds like a return to 1840.
Is that fair?" he asked, referring to the the treaty the Qing
Dynasty was forced to sign after losing the first Opium War.
At the same briefing a different academic said the "hostile
assumptions" of the U.S. are caused by a "trust deficit" which
will worsen bilateral economic relations. "Now we are seeing
decoupling happening in technology, education, academia and
people-to-people exchanges," said Li Yong, a senior fellow at
the China Association of International Trade.
What the U.S. is doing on China today mirrors what the U.S.
did to Japan in 1980s, Li said. The U.S. is creating an "anti-
China climate" as they did during the trade talks with Japan in
that period to force Japanese concessions, he said. "Many
measures they took then are more or less the same as now," Li
said, citing accusations of currency manipulation as an example.
This is every quoted company with 5 yr CDS' yields over 100bps. I've added free cash flow too for the forced sellers of assets.
قالت شركة موانئ قطر مع بداية اكتوبر الماضي انطلق ميناء الدوحة بوابة قطر للسياحة الحرية فى استقبال احد اكثر المواسم السياحية ازدحاما منذ تطوير قطاع السياحة البحرية في قطر، وقالت يعتبر الموسم السياحى البحرى الحالى 2018 – 2019 اقوى موسم يشهده ميناء الدوحة منذ بدء تطوير السياحة البحرية حيث شهد وصول 144.707 سائحا بنسبة نمو تصل الى 100% مقارنة بعدد السياح خلال الموسم السابق مؤكدة ان الميناء قدم تجربة فريدة من نوعها للسياح القادمين من مختلف دول العالم كما وفر ميناء الدوحة اجراءات سريعة وبكفاءة عالية مما اثرى التجربة السياحية للعابرين من خلاله مشيرة الى ان عدد السفن التى رست بالميناء بلغت 44 سفينة سياحية خلال الموسم السياحى 2018- 2019 بنسبة نمو عن الموسم لسابق تصل الى 100% .
مبينة ان ميناء الدوحة استقبل لأول مرة سفينتين فى آن واحد وذلك بعد تطوير نظام الرباط وحوض الميناء وقالت موانئ قطر ' فى انجاز جديد تم استقبال السفينة 'كوين مارى 2' وهى السفينة السياحية الاضخم على الاطلاق التى استقبلتها قطر حيث يصل طولها الى اكثر من 345 مترا يذكر ان المجلس الوطنى للسياحة يهدف الى تحويل قطر الى وجهة سياحية للرحلات البحرية، كما يهدف إلى تحويل قطر إلى نقطة انطلاق ورجوع للرحلات البحرية فى المنطقة، وذلك من خلال التعاون مع الجهات المختلفة فى الدولة مما يسهم فى دعم قطاع الضيافة والطيران وزيادة الإنفاق السياحي،.
كما يستهدف حاليا استقبال نحو 200 ألف مسافر بحرى فى أفق عام 2023 ويعمل على تلبية جميع احتياجات الرحلات البحرية، كما يعمل بشكل وثيق مع الجهات المعنية لتقديم أفضل تجربة سياحية للمسافرين عبر الرحلات البحرية.
وتشير التقديرات المستقبلية للمجلس الوطنى للسياحة إلى أن زيارات السفن السياحية التى ترسو فى قطر سوف تتضاعف ثلاث مرات خلال السنوات الثلاث المقبلة. ويعمل المجلس الوطنى للسياحة بالتعاون مع شركائه فى القطاع على تطوير المرافق الخاصة باستقبال الرحلات البحرية والبنية التحتية بما يتواءم مع النمو المتوقع فى هذا القطاع. وتشير هذه التقديرات إلى أن صناعة الرحلات البحرية يمكنها أن تحقق إيرادات تتجاوز 350 مليون ريال قطرى سنويا بحلول عام 2026
Commentary: Thinking about energy and water together can help ensure that “no one is left behind”
The theme of this year’s World Water Day is “leave no one behind”, a salient theme for the IEA because of the importance our work places on achieving affordable and clean energy for all (SDG 7), but also because energy acts as an enabler of other SDGs, including access to clean water and sanitation for all (SDG 6).
Last year the World Energy Outlook integrated a water dimension into the IEA’s Sustainable Development Scenario (SDS) to better understand how much energy it might take to achieve SDG 6 and what role the energy sector could play.
This analysis found that while energy is essential to solving the world’s water problems, the amount of energy required to attain SDG 6 hardly moves the dial in terms of global consumption. Ensuring that 2.1 billion people have access to clean drinking water, 4.5 billion have safely managed sanitation, collecting and treating more wastewater and using water more efficiently adds less than 1% to global energy demand in the SDS in 2030.
It also found that it is much better to tackle these problems in tandem rather than in parallel as there are significant synergies between SDG 6 and SDG 7, which if tapped could accelerate progress on both goals.
For example, almost two-thirds of those who lack access to clean drinking water in rural areas also lack access to electricity. This opens up a range of potential opportunities to coordinate solutions and make progress on multiple SDGs at once.
This is because many of the technologies and solutions being deployed to provide electricity can also be used to provide access to water. Decentralised solar PV water pumps can replace more expensive diesel pumps or hand-pumps and mini-grids can power filtration technologies, such as reverse osmosis systems, to produce clean drinking water. While there are many solutions that do not require energy, its use can help increase the reliability and the amount of clean water available at a given point in time.
That said, providing access to clean water is just a start. Ensuring it is reliable, affordable and able to scale up to meet continued demand from rising standards of living and population growth is another challenge. So is moving beyond just a household level of access towards delivering access for productive uses, such as agriculture. In each case, the energy load is likely to grow.
As such, meeting these challenges and approaching water and electricity access in an integrated way may shift the emphasis away from off-grid solutions towards mini-grid or grid-connected solutions, especially where water services can provide an “anchor load” for power generation and assist with balancing and storage.
There is also another side to the story: waste can generate energy. Anaerobic digesters can be used to produce biogas from waste, which can then be used by households to displace the use of wood and charcoal. With proper planning and support, such solutions deployed in rural areas can ensure the safe collection, disposal and treatment of waste and contribute to the achievement of clean cooking for all, one of the targets of SDG 7. This has the potential to provide upwards of 180 million households with clean cooking fuel while also reducing indoor air pollution. We will be looking in detail at the potential for biogas in WEO 2019.
Without access to safely managed drinking water Without access to electricity Ethiopia 96.07 61.81940408 Uganda 95.69 81.36834408 Ghana 93.25 31.22373041 Côte d'Ivoire 76.91 68.50494365 Cambodia 84.05 50.19789376 India 50.53 17.86100126 Bangladesh 38.56 27.40053243
{ "chart":{ "type":"column", "height":"35%" }, "plotOptions":{ "line":{ "states":{ "hover":{ "lineWidth":0, "lineWidthPlus":0 } } } }, "title":{ "text":"Share of population without access to electricity or water in rural areas" }, "tooltip":{ "valueSuffix":"%", "valueDecimals":1 }, "yAxis":{ "max":100, "labels":{ "format":"{value}%" }, "title":{ "text":null } }, "series":[{ "colorIndex":2 },{ "type":"line", "colorIndex":8, "lineWidth":0 }] }
Beyond these synergies, it’s important to also highlight how achieving SDG 6 requires improving the way we manage and use water to ensure it is available when needed. While the energy sector’s share of total global water use today is relatively low – accounting for roughly 10% of total global withdrawals and 3% of consumption – there is room to further reduce demand. Water withdrawals for the energy sector in the SDS decline by 20% by 2030 from today’s levels thanks to a combination of energy efficiency, a move away from coal-fired power generation and greater deployment of solar PV and wind.
Getting the water and energy communities to coordinate efforts and financing has the potential to unlock significant progress on some of the most deep-rooted issues of our day: providing electricity, clean cooking, clean drinking water and sanitation to the billions of people who lack these today. This will require thinking and working together, innovative business models and cross-sectoral planning and regulation. There are no simple solutions, but exploiting these synergies can make a big difference for those currently left behind.
Thirsty for more? Download a free extract that contains the analysis on SDG 6 from WEO 2018 and visit iea.org/weo/water for more of the IEA’s analysis on water and energy.
Air pollution in major regions of northern China increased during the first four months of 2019, the environment ministry said on Friday, raising fears that regions have eased curbs on industry to halt the smog amid concerns about a slowing economy.
China is in the fifth year of a war on pollution aimed at allaying public unrest about the state of the country’s skies, rivers and soil by raising industrial standards, cutting coal consumption and improving law enforcement.
However, pollution readings in the smog-prone northern Chinese region consisting of the province of Hebei and the cities of Beijing and Tianjin rose 8% from January to April, the Ministry of Ecology and Environment said.
The readings assessed the amount of airborne particulate matter measuring less than 2.5 microns, known as PM2.5, which is considered one of the most dangerous pollutants because it can penetrate deep into the lungs and cause respiratory illnesses.
For the Beijing, Tianjin and Hebei region, PM2.5 readings were an average of 81 micrograms per cubic meter in the first four months of the year, the ministry said.
A neighboring region known as the Fenwei Plain, home to some of China’s most polluted cities, also saw PM2.5 rise 7.8% to 83 micrograms over the four months.
In 337 cities monitored nationwide, PM2.5 remained unchanged over the first four months, reaching an average of 49 micrograms per cubic meter. China’s official standard is 35 micrograms per cubic meter.
Environmental officials have been at pains to show that efforts to reduce pollution will not be relaxed this year even though the Chinese economy fell to its slowest rate of growth since 1990.
However, Environment Minister Li Ganjie has warned that some regions have lost “momentum” when it comes to curbing smog.
Some local governments have blamed unfavorable weather conditions for the increase in smog over the late 2018-early 2019 period.
But Lauri Myllyvirta, senior analyst with environmental group Greenpeace, said in an email that pollution in Beijing and surrounding regions has rebounded largely as a result of the relaxation of industrial output restrictions and a 60-million tonne surge in coal consumption over the 2018-2019 winter period.
“Predictably, local governments did away with restrictions on industrial operation that had squeezed output and emissions in 2017-18,” he said, noting that steel, cement, nonferrous metals and thermal power production all increased last winter after falling a year earlier.
While Australia’s opposition Labor Party is the obvious loser from the weekend election, the anti-coal environmental lobby suffered probably a bigger blow and will need to re-think its strategy to end mining of the polluting fuel.
The conservative Liberal Party-led coalition is likely to have pulled off one of the great political escapes by returning to office for a third term, confounding polls and pundits who thought Labor was a near certainty to win the May 18 election.
While Prime Minister Scott Morrison may not secure an outright majority in the 151-seat lower house of parliament, results indicated that Labor, led by former unionist Bill Shorten, would have no chance of victory.
One of the battlegrounds between the two major parties in the campaign had been climate change, with Labor promising far stronger action that the Coalition, which counts among its parliamentarians several who are decidedly pro-coal and sceptical of the science of climate change.
Morrison, prior to becoming the third Liberal leader in five years last August, once brandished a lump of coal in parliament in a show of support for the mining industry and the use of the fuel in generating electricity.
Australia vies with Indonesia for the title of the world’s largest coal exporter, and is dominant in the global market for high-quality coking coal used to make steel.
The Liberal victory means the coal mining and coal-using electricity sectors have been spared a Labor government that would have in all likelihood made it harder for them to grow.
A returned Liberal government is likely to pursue policies more friendly to the coal industry, while at the same time being cautious on expanding support for renewable energy.
“Start Adani,” was a two-word tweet from Resources Minister Matt Canavan, about 2 3/4 hours after voting closed on May 18, when it was starting to become clear that the Liberals were about to pull off a stunning victory.
That was a reference to the Carmichael mine in Queensland state being proposed by India’s Adani Enterprises, which is bitterly opposed by environmentalists who say the world can ill afford the pollution that will result from the burning of its 8 million tonnes a year output.
The election showed that in the constituencies near the mine, voters chose the prospect of jobs over climate concerns.
GREEN ACTIVISTS IGNORED
The Liberals had expected to lose a swag of seats in Queensland, but instead they held all their marginal constituencies and even took two from Labor.
It’s not clear whether this strong result in the state most reliant on coal mining is a repudiation of Labor’s climate policies, or more a reflection of voter disquiet over Labor’s other policies that would have resulted in higher taxes and spending.
Canada will move quickly to ratify the new North American trade pact, Foreign Minister Chrystia Freeland said on Saturday, a day after the United States agreed to lift tariffs on Canadian steel and aluminum.
U.S. President Donald Trump had imposed the global “Section 232” tariffs of 25% on steel and 10% on aluminum in March 2018 on both Canada and Mexico on national security grounds, invoking a 1962 Cold War-era trade law.
The metals tariffs were a major irritant for Canada and Mexico and had caused them to halt progress toward ratification of the new U.S.-Mexico-Canada Agreement (USMCA), the trilateral trade deal signed last year which will replace the 25-year-old North American Free Trade Agreement (NAFTA).
“We were very clear that as long as the 232 tariffs were there it would be very, very hard for us to ratify the new NAFTA, and that is why we did not table the legislation,” Freeland said in an interview broadcast by CBC radio.
“Now that that big obstacle is lifted, full steam ahead,” she said, without saying when the agreement would be presented to parliament, which closes down in June ahead of an October national election.
“I hope all members of the house will support this agreement,” she added.
U.S. Vice President Mike Pence said on Friday he would meet with Canada’s Prime Minister Justin Trudeau in Ottawa on May 30 to discuss “advancing” ratification.
While several U.S. Democrats applauded removal of the tariffs, some on Friday said USMCA was not yet ready for their support.
“When it comes to the new agreement, House Democrats continue to have a number of substantial concerns related to labor, environment, enforcement, and access to affordable medicines provisions. Those issues still need to be remedied,” said U.S. House Ways and Means Committee Chairman Richard Neal on Friday.
Freeland said Canada was in the process of reaching out to American Democrats to allay their concerns.
“We have been meeting with many leading Democrats to talk to them about the new NAFTA,” Freeland said. “We have a good, strong conversation happening.”
Despite the breakthrough on tariffs and the USMCA agreement last year, Freeland said Canada was still worried about U.S. protectionism.
“I am still concerned about U.S. protectionism and I think it would be naive for anyone to think that there is any kind of permanent safety or security. The reality is that this U.S. administration is openly, explicitly, and proudly protectionist,” Freeland said.
U.S. President Donald Trump issued a new threat to Tehran on Sunday, tweeting that a conflict would be the “official end” of Iran, as Saudi Arabia warned it stood ready to respond with “all strength” and said it was up to Iran to avoid war.
The heightened rhetoric follows last week’s attacks on Saudi oil assets and the firing of a rocket on Sunday into Baghdad’s heavily fortified “Green Zone” that exploded near the U.S. embassy.
“If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!” Trump said in a tweet without elaborating.
A U.S. State Department official said the rocket attack in Baghdad did not hit a U.S.-inhabited facility and produced no casualties nor any significant damage. No claims of responsibility had been made, but the United States was taking the incident “very seriously.”
“We have made clear over the past two weeks and again underscore that attacks on U.S. personnel and facilities will not be tolerated and will be responded to in a decisive manner,” the official said in an emailed statement. “We will hold Iran responsible if any such attacks are conducted by its proxy militia forces or elements of such forces, and will respond to Iran accordingly.”
Riyadh, which emphasized that it does not want a war, has accused Tehran of ordering Tuesday’s drone strikes on two oil pumping stations in the kingdom, claimed by Yemen’s Iran-aligned Houthi group. Two days earlier, four vessels, including two Saudi oil tankers, were sabotaged off the coast of the United Arab Emirates.
In response, countries of the Gulf Cooperation Council (GCC) began “enhanced security patrols” in the international waters of the Arabian Gulf area on Saturday, the U.S. Navy’s Bahrain-based Fifth Fleet said on Sunday.
Iran has denied involvement in either incident, which come as Washington and the Islamic Republic spar over sanctions and the U.S. military presence in the region, raising concerns about a potential U.S.-Iran conflict.
“The kingdom of Saudi Arabia does not want a war in the region nor does it seek that,” Minister of State for Foreign Affairs Adel al-Jubeir told a news conference on Sunday.
“It will do what it can to prevent this war and at the same time it reaffirms that in the event the other side chooses war, the kingdom will respond with all force and determination, and it will defend itself and its interests.”
Saudi Arabia’s King Salman on Sunday invited Gulf and Arab leaders to convene emergency summits in Mecca on May 30 to discuss implications of the attacks.
“The current critical circumstances entail a unified Arab and Gulf stance towards the besetting challenges and risks,” the UAE foreign ministry said in a statement.
The U.S. Navy’s Fifth Fleet said in its statement about increased maritime patrols that GCC countries were “specifically increasing communication and coordination with each other in support of regional naval cooperation and maritime security operations in the Arabian Gulf,” with navies and coast guards working with the U.S. Navy.
Saudi Arabia’s Sunni Muslim ally the UAE has not blamed anyone for the tanker sabotage operation, pending an investigation. No-one has claimed responsibility, but two U.S. government sources said last week that U.S. officials believed Iran had encouraged the Houthi group or Iraq-based Shi’ite militias to carry it out.
The drone strike on oil pumping stations, which Riyadh said did not disrupt output or exports, was claimed by the Houthis, who have been battling a Saudi-led military coalition in a war in Yemen since 2015.
The Houthi-controlled SABA news agency said on Sunday, citing a military source from the group, that targeting Aramco’s installations last week was the beginning of coming military operations against 300 vital military targets.
Targets include vital military headquarters and facilities in the United Arab Emirates, Saudi Arabia, as well as their bases in Yemen, the source told SABA.
The head of the Houthis’ Supreme Revolutionary Committee, Mohammed Ali al-Houthi, derided Riyadh’s call to convene Arab summits, saying in a Twitter post that they “only know how to support war and destruction”.
A Norwegian insurers’ report seen by Reuters said Iran’s Revolutionary Guards were “highly likely” to have facilitated the attack on vessels near the UAE’s Fujairah emirate, a main bunkering hub lying just outside the Strait of Hormuz.
SAUDI PRINCE CALLS POMPEO
Iranian Foreign Minister Mohammad Javad Zarif has dismissed the possibility of war erupting, saying Tehran did not want conflict and no country had the “illusion it can confront Iran”. This stance was echoed by the head of Iran’s elite Revolutionary Guards on Sunday.
“We are not pursuing war but we are also not afraid of war,” Major General Hossein Salami was cited as saying by the semi-official news agency Tasnim.
Washington has tightened economic sanctions against Iran, trying to cut Tehran’s oil exports to zero, and beefed up the U.S. military presence in the Gulf in response to what it said were Iranian threats to United States troops and interests.
Crown Prince Mohammed bin Salman discussed regional developments, including efforts to strengthen security and stability, in a phone call with U.S. Secretary of State Mike Pompeo, the Saudi Media Ministry tweeted on Sunday.
“We want peace and stability in the region but we will not sit on our hands in light of the continuing Iranian attack,” Jubeir said. “The ball is in Iran’s court and it is up to Iran to determine what its fate will be.”
He said the crew of an Iranian oil tanker that had been towed to Saudi Arabia early this month after a request for help due to engine trouble were still in the kingdom receiving the “necessary care”. The crew are 24 Iranians and two Bangladeshis.
Saudi Arabia and Shi’ite Iran are arch-adversaries in the Middle East, backing opposite sides in several regional wars. In a sign of the heightened tension, Exxon Mobil evacuated foreign staff from an oilfield in neighbouring Iraq.
Bahrain on Saturday warned its citizens against travel to Iraq and Iran and asked those already there to return. The U.S. Federal Aviation Administration has issued an advisory to U.S. commercial airliners flying over the waters of the Gulf and the Gulf of Oman to exercise caution.
There is no doubt that the plan to deter Iran is on the table of US President Donald Trump. It includes the military option which will be ferocious.
In a remarkable development, Saudi Arabia and some other GCC countries have agreed to an American proposal to redeploy US forces in Arabian Gulf waters so as to warn the Mullahs against any attempt to start a military escalation, attack Gulf countries or jeopardize American interests.
The United States has ordered its non-essential government staff to leave Iraq. Holland has halted its diplomatic mission in Baghdad and Germany has suspended military training in Iraq. Britain has increased its readiness and warned its employees to be more careful, and some oil companies have evacuated their staff. All of this is because of the rising tension in the region.
What do the warnings and the rising readiness by some Arab and Western countries mean? Why is America sending massive military power to the Gulf? The US military force consists of aircraft carriers, offensive sea and land attack ships, Patriot batteries, B-52 warplanes and others.
Is this just a show of strength or is there a tactical purpose?
Iran still insists on its provocations and violations that may lead the region into a new war and a massive military confrontation.
The evidence for this is Iran abandoning its commitments in the nuclear agreement, resuming the enrichment of uranium and reproducing centrifuges along with its involvement in terrorist attacks.
The US has tied its military warning to Iran to the threats to its own interests and those of its allies.
The US accuses Iran of being behind the attacks on four commercial ships in the territorial waters of the United Arab Emirates.
Sources close to the Iranian Revolutionary Guard have confessed that Iran’s agents and arms in the region were behind this criminal act.
The Houthis in Yemen, who are the Militia of the Mullahs, have targeted two oil pumping stations of Aramco in Dawadmi and Afif with Iranian-made drones.
The Arabian Gulf today is witnessing a serious escalation of events in the light of Iran’s continued threats and provocations.
All of these Iranian terror crimes bring to mind the “Tanker War” during the Iran-Iraq War and the duel between Washington and Tehran in Arabian Gulf waters during the period 1984-1988.
There is no doubt that we are in for a very hot summer. The massing of military forces is not just for a show of strength. Iran would be the biggest loser but the Mullahs are too cowardly to face America and its allies face to face.
However, Iran will continue to entice its agents and militias in Syria, Iraq, Yemen and Lebanon and also its cells in the GCC to carry out terrorist attacks.
It will also continue its provocations in Arabian Gulf waters while it will beg for mediation under the table.
In this case, Washington may resort to the use of military might to discipline Iran as it is clear that Tehran only understands the language of power.
The use of America’s military power will be supported by an uprising of the Iranian people who are fed up with the rule of the Mullahs.
— The author is a Saudi writer. Follow him on Twitter: @JameelAlTheyabi
The Agriculture Department is rushing to finish a new trade assistance package for farmers hurt by the ongoing trade war with China, while congressional negotiators this week look to pass a long-stalled disaster aid package before the weeklong recess for Memorial Day.
USDA has yet to release critical details of the aid package, expect to say that it will total $15 billion to $20 billion and will include direct payments as well as some commodity purchases. The plan is expected to feature a modified form of the Market Facilitation Program that the Trump administration launched last year after China imposed retaliatory tariffs on imports of U.S. farm commodities.
“There’s legitimate anxiety in the farm community” while the trade war with China remains unsettled, Agriculture Secretary Sonny Perdue said on Fox News. “That’s why President Trump is committed to supporting farmers in the meantime.”
Senate Majority Leader Mitch McConnell, R-Ky., said in an Agri-Pulse Open Mic interview that the trade dispute needs to end as soon as possible and that the trade aid package will never sufficiently compensate for the losses to farmers.
“Whatever amount is settled on you’ll have an argument that it discriminate against some commodities and not others, and you’ll have an overwhelming feeling that it’s a pittance compared to the market share that’s been lost," he said.
The National Corn Growers Association has released a list of proposals to the administration that include significantly increasing the one-cent MFP payment rate for corn. According to NCGA, corn growers are losing about 40 cents a bushel due to the trade disruption with China.
There is fear in the soybean industry that the prospect of trade aid, coupled with the inability of some farmers to plant as much corn as they had originally planned due to planting issues throughout the Corn Belt, could skew planting decisions and further depress soybean prices. One key issue is whether the new MFP payments will be based on 2019 production.
Because of the “large potential impacts on acreage decisions” USDA needs to release details of the trade package “in the next week to 10 days,” University of Illinois economist Scott Irwin wrote on hits Twitter account Friday.
Meanwhile, many producers are just as eager for Congress to pass a disaster aid package to compensate farmers for losses due to last year’s hurricanes and wildfires as well as flooding in the Midwest in March.
House and Senate negotiators have expressed increased optimism that a deal could be struck in time to pass an aid package this week. The White House agreed to increased spending for Puerto Rico, a key demand for Democrats, while Democrats have agreed to include spending for border security in the package.
"We're going to be voting before Memorial Day; hopefully we're voting on a package that will actually become law," McConnell said. "This has been the longest period in modern times between a disaster and a disaster supplemental."
In an exchange with House Majority Leader Steny Hoyer on Friday, GOP Whip Steve Scalise, R-La., said he was encouraged by the progress in the negotiations. “Both sides seem to be willing to get this resolved,” he said.
“Clearly, if we get agreement, and that’s a big if, but hopefully we can. … we want to move as quickly as possible,” said Hoyer, D-Md.
The legislation also is expected to include a provision sought by McConnell to ensure that industrial hemp is eligible for whole-farm revenue insurance policies in 2020. The 2018 farm bill made the farm bill eligible for crop insurance, but it is expected to take USDA’s Risk Management Agency at least two years to develop other types of policies for hemp.
The bill also may include provisions to ensure USDA has adequate spending authority for the trade assistance package using its Commodity Credit Corp. account.
Also this week, a hearing that a House Ways and Means subcommittee will hold Wednesday on enforcement provisions in the U.S.-Mexico-Canada trade agreement that could provide some clues as to how Democrats view the deal now that President Trump has lifted the steel and aluminum tariffs on Canada and Mexico.
The witnesses will include labor representatives as well as Devry Boughner Vorwerk, corporate vice president for global corporate affairs at agribusiness giant Cargill, Inc.
A member of the trade subcommittee, Rep. Ron Kind, D-Wis., said his colleagues will likely insist on some changes to the text of the agreement to address their concerns about the enforceability of labor and environmental standards.
“Chances are he (U.S. Trade Representative Bob Lighthizer) is going to have to open this up a little bit (and) get Mexico and Canada to agree on some limited measures there without a full-blown renegotiation,” Kind said.
Here is a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, May 20
Organic Trade Association’s annual Washington meeting, through Thursday,
Tuesday, May 21
9:30 a.m. — Senate Agriculture Committee hearing on climate change, 328A Russell
10 a.m. Senate Energy and Natural Resources hearing on renewable energy, Dirksen 366
10:30 a.m. — House Appropriations Committee markup of Energy-Water spending bill, 2359 Rayburn
11 a.m. — House Agriculture subcommittee hearing on animal pest and disease prevention, 1300 Longworth
2 p.m. — House Natural Resources Subcommittee hearing on the U.S. Fish and Wildlife Service, 1324 Longworth
Wednesday, May 22
10 a.m. — House Ways and Means Subcommittee hearing on enforcement provisions in the U.S.-Mexico-Canada trade agreement, 1100 Longworth
10 a.m. — House Energy and Commerce Committee hearing on the LIFT ("Leading Infrastructure for Tomorrow's America Act") infrastructure bill, 2123 Rayburn
3 p.m. — Environmental and Energy Study Institute forum, “Biogas: Pro-Economy and Pro-Climate,” 2322 Rayburn.
Thursday, May 23
9 a.m. — House Select Committee on the Climate Crisis hearing, "Creating a Climate Resilient America," 2247 Rayburn.
Friday, May 24
For more news, go to: www.Agri-Pulse.com
In the days leading up to the Australian federal election – scheduled for Saturday, May 18 – the Liberal Party of Australia has informed it will commission an independent audit of NOPSEMA’s, the country’s offshore regulator, current consideration of exploration in the Great Australian Bight.
Namely, Equinor’s plans for offshore exploration in the Great Australian Bight are currently being reviewed by the country’s independent offshore regulator, NOPSEMA.
The Liberal National Government said in a statement on Thursday it had recognized the importance of the Great Australian Bight and the surrounding region to local communities, and the fishing and tourism industries.
“The region is known for its unique environment and deserves strong protection,” the Liberal Party said in the statement, claiming that Australia has one of the safest regimes for offshore oil and gas in the world.
The industry is overseen by Australia’s independent regulator NOPSEMA (National Offshore Petroleum Safety and Environmental Management Authority), which was established on January 1, 2012.
“The Liberal National Government recognizes community concerns around drilling in the Great Australian Bight and community groups are seeking further assurance of environmental protection,” the party said.
The Liberal National Government will commission an independent audit, to be conducted by the Chief Scientist, to provide this additional level of assurance to the community.
According to the statement, the independent audit will be jointly commissioned by the Minister for Resources and the Minister for the Environment. The Chief Scientist will be asked to work with NOPSEMA to assure all environmental considerations are thoroughly considered as part of the assessment process and decision making of the independent regulator. The audit will be conducted in tandem with the assessment process.
Exploratory drilling proposals will continue to be assessed by NOPSEMA, which has an independent assessment process underway under Australian law.
Equinor’s drilling plans
To remind, Norway’s oil and gas giant Equinor in April filed an environment plan to Australian offshore regulator for its proposed petroleum drilling activity in the Great Australian Bight amid claims by environmental groups of it being too risky. Following the submission of the plan, NOPSEMA started the formal assessment of the plan, under which a proposed activity must be found to meet all legislative requirements to proceed.
Through its assessment, NOPSEMA said it would consider potential environmental impacts from the proposed activity to ensure appropriate precautions are taken. The regulator’s decision was initially expected by May 23, 2019.
Equinor Australia is the sole titleholder of exploration permit EPP39, located in the Ceduna Sub-basin in Commonwealth waters off southern Australia. As part of the permit commitment, Equinor plans to drill the Stromlo-1 exploration well, which is located approximately 400 km southwest of Ceduna and 476 km west of Port Lincoln and in a water depth of approximately 2,240 meters.
Equinor plans to spud the Stromlo-1 exploration well in late 2020. The duration of the drilling of the well is expected to be approximately 60 days.
Labor calls for study into oil spill impact
Meanwhile, Australian Labor Party has also said that, if elected, one of its first acts will be to commission an independent scientific study into the impact of an oil spill in the Great Australian Bight. The purpose of the study will be to help inform the decision making of the independent regulator.
The Labor said that it will be an independent scientific study to increase the capacity of the independent regulator to properly make an assessment and that the study will report before the project is approved.
In a statement on Thursday, May 17 environmental organization Greenpeace welcomed the Labor Party’s new commitment that a Shorten Labor government would block Equinor’s oil drilling approval from proceeding in the Great Australian Bight until an independent scientific study into the impacts of an oil spill is completed.
Greenpeace senior campaigner Nathaniel Pelle said: “A stay of execution is welcome. But it’s clear a total ban on drilling in the Bight is warranted.”
He added: “The Labor Party has responded to the growing calls from international experts, surfers, the fishing industry, and everyday Australians who love our beaches, by delaying this dangerous proposal to drill for oil in the Great Australian Bight pending an independent inquiry.”
“If Bill Shorten is elected on Saturday, and is truly committed to putting the environment before oil company profits, he’ll go one step further and rule the project out completely,” said Pelle.
Regulator delays decision
While it was unclear at first how either of the parties’ proposals for independent studies would be done in practice, as NOPSEMA was initially expected to make its decision by May 23, the regulator issued a statement on Friday, May 17 changing the deadline.
In the statement the regulator said it was “unable to make a decision on their environment plan for proposed exploration drilling in the Great Australian Bight within the initial 30 day assessment period. The next decision point is now scheduled for 27 June 2019.”
The Great Australian Bight drilling plans have also been met with resistance by the Australian Greens and its Senator Sarah Hanson-Young who said that the party would not let “Australian tourism and fishing industries be put at risk for the sake of multinational corporate profits, no matter what spin Equinor tries to put on it.”
Offshore Energy Today Staff
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The NSE Nifty climbed 128.25 points - or 1.14% - this week
Exit polls along with the final verdict of the 2019 general elections will keep the equity investors on tenterhooks in the coming week, according to experts. The outcome of the seven-phase 2019 general elections will be announced on Thursday, May 23. Apart from general election results, any developments on the global trade front and tensions in the Middle East will be other major drivers for the markets. The corporate earnings season will play an important role in determining the equity indices' movement, they add.
"Now investors are closely eyeing exit polls, which is scheduled on 19th May. And this may lead to volatility during the week starting May 20," said DK Aggarwal, chairman and managing director, SMC Investments and Advisors.
This week, the pre-election rally in domestic market was cut short by escalation in trade tensions between US and China, along with mixed Q4 results, and anticipation of a consumption slowdown ahead.
"After many days of consolidation, Nifty has bounced back from a low of 11,100 which seems to be an intermediate support for the market," said Vinod Nair, head of research, Geojit Financial Services.
The NSE Nifty climbed 128.25 points - or 1.14 per cent - this week, while the S&P BSE Sensex added 467.78 points (1.25 per cent).
"However, next week is eventful given exit polls and final verdict. Market is likely to be indecisive till final outcome is known, while extension of volatility cannot be ruled out," he added.
Bharat Forge, Glaxosmithkline Pharma, Hindustan Petroleum Corp, Tata Motors, DLF, Jindal Steel and Power, BEML, India Cements and NTPC are expected to announce their earnings for the January-March period during the week.
The rupee deprecated by 31 paise to close at 70.23 against the US dollar on a weekly basis, compared with its close of 69.92 against the greenback the previous week.
"Next week is a make or break on account of domestic elections exit polls and actual results... markets are factoring a BJP led coalition coming to power, any different result can be a big disappointment. A positive outcome may lead to a moderate rally in markets," said Sajal Gupta, head forex and rates, Edelweiss Securities.
He also said the rupee is expected to trade between 69.20 and 70.80 against the dollar.
In terms of technical charts, the NSE Nifty could head towards the next major supports of 11,227-11,180 points in the week.
"Technically, with the Nifty reversing the recent uptrend and entering into a new downtrend, the index could now head towards the next major supports of 11,227-11,180 in the coming week," said Deepak Jasani, head of retail research at HDFC Securities.
"Any pullback rallies could find resistance at 11,358-11,457."
Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on ndtv.com/elections. Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections. Election results will be out on May 23.
China’s scrap metal importers expect disruptions in shipments to start this month because of uncertainty surrounding new scrap restrictions starting in July, depriving the world’s biggest copper consumer of a crucial source of the metal.
Starting on July 1, China will restrict high-grade Category 6 copper scrap, as well as aluminum and steel scrap, an extension of an earlier ban that started this year on Category 7 scrap, which has less metal content.
From then, scrap metal importers into China will have to show they have the capacity to manufacture the imported scrap into refined metal or semi-finished products such as copper cathode or rods in order to receive licenses and quotas from the Ministry of Ecology and Environment, according to five sources familiar with the process..
China, the world’s biggest metals consumer, imported 5.34 million tonnes of scrap metal last year, down a third from 2017, according to customs data, as an environmental campaign against solid waste gained momentum.
On a copper contained basis, China’s scrap copper imports last year accounted for almost 10 percent of the country’s total copper consumption of 13.05 million tonnes, according to Reuters calculations using data from Refinitiv, customs and China’s industry ministry.
Scrap professionals expect the Category 6 restrictions to cause further disruptions to trade flows and supply after the Sino-U.S. trade war saw Japan overtake the United States - and Hong Kong - to become China’s biggest copper scrap supplier last year.
“We will see at least some short-term disruptions on the scrap trade flows in June and July since the government has announced taking on some trials this month. It’s not crystal how this quota system will work,” Chris Wu, a senior copper consultant at CRU in Beijing, said last week during LME Asia week in Hong Kong.
Chinese copper scrap importer HKM expects China’s scrap imports to fall by 40% to 50% in May and June. The company imports about 10,000 tonnes per month of copper scrap into China, using half of that at its own copper rod plant in Jiangxi province.
HKM Executive Director Gary Chen said the uncertainty around the July 1 changes will keep importers from booking shipments that could arrive after the date.
“People are not sure of the policy from July 1, so they don’t want to make any long-distance orders now,” he said. Chen is taking the further precaution of setting a deadline of June 5 for any cargoes to arrive at port, in order to have enough time to clear customs.
Chen is “very confident” HKM will receive a license since it has the Jiangxi plant and has invested in environmentally-friendly technology. But he is concerned that his customers may find their applications rejected if they cannot demonstrate a track record of importing.
A scrap source with operations in Zhejiang said his company had already “paused” imports but might use an existing copper cathode plant or a new plant it is building to help it acquire a license.
Long Ziping, the chairman of Jiangxi Copper , one of China’s biggest copper firms, told Reuters last month that it would be “no problem” getting a scrap import license since the company can show it is a refined copper producer.
Even so, Jiangxi Copper is planning a plant in Malaysia that will process scrap into refined copper, for possible onward shipment to China.
Under current solid waste classifications, all scrap metal imports will be banned in China by end-2020, but lobbying is under way to have high-grade material re-categorized to a resource that could still be allowed in.
A collection of top physical commodities firms and financial institutions, supported by technology giant Accenture, today announced plans to explore launching Forcefield, a pioneering inventory management system focused on implementing blockchain, Internet of Things (IoT) sensors, and near-field communication (NFC) chips to securely and efficiently manage the post-trade processing of commodity transactions.
Accenture, ABN Amro, Anglo American, CMST International, Hartree Partners, ING Bank, Mercuria and OCBC Bank, are amongst those that have so far signed up to the Memorandum of Understanding (MOU).
“Forcefield has been designed by market experts to address common industry pain points in a targeted manner,” said Mark Bradley, who has been co-ordinating Forcefield on behalf of the consortium members. “The full supply chain is represented in the product design by incorporating input from existing, and pipeline, consortium members and users.”
Forcefield is an innovative digital platform which manages commodities throughout the entire supply chain life-cycle. The system enhances the security of title and the efficiency of related processes to reduce both risks and costs of handling physical inventory. Forcefield uses traceability as a sustainable sourcing tool to help the supply chain monitor provenance and attestations throughout the product life-cycle. Forcefield is a global tool reflective of both the industry it represents and the global constitution of the consortium members. Forcefield will be open and inclusive to all market participants in order to drive mass adoption.
“We have seen in other sectors of the commodity industry the power of market participants applying innovative technology to solve for unnecessary friction costs and inefficiencies,” said Marco Dunand, co-founder and CEO of Mercuria. “Forcefield’s focus on securing inventory should promote industry growth to the benefit of all in the supply chain while also allowing a platform for senior industry players to drive forward the important environmental, social, and governance agenda.”
Forcefield has been funded and developed for the past 12 months as a stand-alone product moving through the successful proof of concept phase with Accenture as the technology provider. Following several cycles of development, Forcefield formed as an independent company to finalise the platform deployment and operate as a market utility. The system will initially focus on refined metals but functionality will be expanded across other dry bulk commodities.
TEHRAN – Deputy director of Iran’s Ports and Maritime Organization (PMO) said crude oil loadings and exports from the country’s ports has not been halted and the exports are ongoing just like before, ILNA reported on Saturday.
“Perhaps the destinations of oil cargoes from our ports have changed but the legal exports are ongoing,” Hadi Haqshenas said.
The official noted that the oil ministry has adopted new tactics and new destinations in shipping its oil exports following the re-imposition of U.S. sanctions, giving no details of the new tactics or destinations.
“Of course, it cannot be denied that the loading of oil and products has fallen compared to the past, but the shipping of oil cargoes from out ports has definitely not stopped,” he added.
Iranian oil industry has been under pressure from the U.S. efforts to isolate the country by reimposing sanctions. The new round of sanctions targeting Iran’s oil sector were put in action on November 4, 2018.
In late April, U.S. President Donald Trump’s administration announced that Washington has decided not to extend waivers allowing major importers to continue buying oil from Iran. The waivers ended on May 2.
Earlier this month, Iranian Deputy Oil Minister Amir-Hossein Zamaninia said Iran is mobilizing all its resources to sell its oil in a gray market, countering unjust and illegitimate U.S. sanctions.
“This is not smuggling. This is countering sanctions which we do not see as just or legitimate”, Zamaninia said in a conference held at the Islamic Azad University of Tehran.
tehrantimes
Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar ingots, wafers, cells, modules, and other solar power products primarily under the Canadian Solar brand name. The company operates through two segments, Module and System Solutions, and Energy. Its products include various solar modules that are used in residential, commercial, and industrial solar power generation systems. The company also provides specialty solar products consisting of Andes Solar Home System, an off-grid solar system that provides an economical source of electricity to homes and communities without access to grid; and Maple Solar System, a clean energy solution for families, as well as solar system kits, which are a ready-to-install packages that consist inverters, racking systems, and other accessories. In addition, it develops, builds, and sells solar power projects; performs engineering, procurement, and construction (EPC) work for solar power projects; and offers operation and maintenance services that include inspection, repair, and replacement of plant equipment, site management, and administrative support services. Further, the company generates and sells electricity through its solar plants with an aggregate capacity of approximately 1,211.1 megawatts. Canadian Solar Inc. offers its products to distributors, system integrators, project developers, and installers/EPC companies. The company has operations in North America, South America, Europe, Africa, the Middle East, Australia, and Asia. Canadian Solar Inc. was founded in 2001 and is based in Guelph, Canada.
Sterlite Copper Wednesday expressed hope that it will resume operations in the next couple of months at its Tutocrin plant which was shut after 13 people died during protests a year ago.
On May 22, 2018, anti-Sterlite protests turned violent with the agitators fighting pitched battles with the police and 13 people were killed in police firing.
The first anniversary of the incident was observed in Tuticorin Wednesday, with scores of locals turning up to remember the victims.
"We are hopeful of starting the plant in next couple of months," Sterlite Copper CEO Pankaj Kumar told PTI over phone.
The protesters were demanding the closure of Vedanta's Sterlite Copper unit in Tuticorin over pollution concerns.
ALSO READ:Sterlite Tech Q4 net profit up 47% to Rs 165.17 crore
Kumar, however, was of the view that "high current was created by some vested interests to show that we are not complying to environment. But the fact is that we are much below the standard set up by pollution control board."
He further said the company has incurred financial losses to the tune of USD 400 million till date due to closure of operations at its smelter unit at Tuticorin.
"More than our loss, it is the country's loss," he said.
Earlier in the month during a conference call, Vedanta's Chief Executive Officer Kuldip Kaura had said, "As you are aware, the consent to operate at Tuticorin was not approved and we have engaged with the authorities with the responses to some of the questions which they raised and we believe the resolution for this should happen soon."
ALSO READ:SC rejects Vedanta Group's plea seeking early hearing in Sterlite Copper case
Vedanta had said its operations at Tuticorin were shut as its application for renewal of consent to operate has not been approved.
"We are working with the regulatory body to provide the required clarifications in order to obtain a positive outcome for our application," the company said.
The victims were Wednesday remembered by their near and dear ones and others who lit candles before their portraits.
The National Green Tribunal later allowed the opening of the copper unit, but the Supreme Court had on February 18 set aside the order. It, however, gave liberty to Sterlite to approach the high court against the closure order.
Last month, the Tamil Nadu government opposed in the Madras High Court a plea of Sterlite Industries seeking appointment of an independent committee to inspect its copper smelter unit in Tuticorin which has been closed permanently over pollution concerns.
Source: Xinhua| 2019-05-22 22:33:32|Editor: yan
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BEIJING, May 22 (Xinhua) -- The U.S. escalation of trade friction with China will incur negative impact on Latin American economies, according to scholars.
Higher tariffs as well as U.S. restrictions on investment between the two countries will send the global trade and investment liberalization process that continued during the past century into a backwater, said Enrique Dussel Peters, coordinator of the Center for China-Mexico Studies of the National Autonomous University of Mexico.
The trade friction will shrink global trade, risk threatening global economic growth, and weigh on the export-oriented Latin American economies, which already suffered from trade weakness, said Yue Yunxia, a scholar with the Institute of Latin American Studies under the Chinese Academy of Social Sciences.
Andres Borquez Basaez, director of Chinese Studies Program at the Institute of International Studies with the University of Chile, said the world economy was an interdependent system and U.S.-China trade friction would cause damage to developing countries.
Yue said some Latin American countries would take a direct hit as falling trade volumes could erode the countries' revenues from Panama Canal passage charges.
For years, China’s industrial heartland has been cloaked in smog, its waterways choked with pollution pumped from enormous clusters of factories churning out the mountains of cement and steel needed to build the Chinese economy.
Aiming to tackle what has become a huge public health problem, the authorities have cracked down on polluting industries, targeting provinces like Henan, which has a population of 100 million people and hundreds of factory towns.
According to interviews with factory and business owners, and consumers and workers across Henan, that crackdown - conducted with often heavy-handed local enforcement - is crippling the economies of towns and cities that depend on polluting industries.
Manufacturers across Henan have been particularly hard hit by the new environmental regulations, compounding the pressures the province faces from China’s slowing economy and a grinding trade war with the United States.
It also highlights the trade-off China faces between providing a healthier environment for its citizens and maintaining economic growth in a province whose climb from poverty has lagged that of coastal regions.
China does not provide statistics on the costs of the environmental crackdown, but it has said that short-term pain will lead to long-term growth through an economic “upgrade”.
The information office of the State Council, China’s cabinet, did not respond to a faxed request for comment on the economic effects of the new restrictions.
It’s difficult to get a full picture of Henan’s economy from unreliable official figures, as it is for the whole country. Henan’s official growth rate was 7.6% in 2018, higher than the national rate and down 0.2 of a percentage point from 2017.
But the interviews conducted by Reuters across Henan suggest consumers are spending less, cities are struggling to retool their economies and the pollution crackdown is hurting businesses and employment.
STEEL TOWN PAIN
The steel-producing center of Anyang, which has long had some of the worst air in China, is one place that has been hit hard by the anti-pollution campaign.
The city of more than 5 million people, dominated by the infrastructure and insignia of the state-owned Anyang Iron and Steel Group, has forced local industry to upgrade equipment and curb pollution, and shut down companies that were unwilling or unable to comply.
Li Huifeng, president of Baoshun High-Tech Corporation, a coking coal company founded by his parents in 1983, said the cost of compliance had been painful.
Baoshun’s huge plant, built in the hills in the west of Anyang, was forced to implement production cuts last winter even though it had installed low-emissions equipment that exceeded required standards.
“Last year, business was really good but this year it is full of uncertainties,” said Li. He added that new efficiency guidelines were likely to result in the closure of many producers of coking coal, which is used in steel production.
Li Xianzhong, the owner of the Xinyuan Steel Mill in Anyang’s western outskirts, said he was facing curbs on production as well as spiraling costs because of the new environmental regulations.
According to industry estimates, environmental costs per ton of steel produced have risen to around 150 yuan per ton, up from less than 50 yuan per ton when the war on pollution was launched in 2014.
“All this equipment needs a lot of capital, and after you’ve invested, the operation costs are also higher,” said Li. “If you don’t meet the standards, you aren’t allowed to operate.”
Near the sprawling Anyang steel plant in the city center, residents and workers complained that the new environmental inspection rules had made it harder to make a living.
Many small workshops, which often use small metalworking furnaces, have also been targeted.
“Before we would just give them a pack of cigarettes or treat them to a meal and you’d then be fine for a year, but now it’s no use,” said a bicycle repairman, identifying himself by his surname Zhang, whose workshop near the plant was shut by inspectors.
Over the past years, Anyang has tried encouraging new and cleaner forms of economic growth. It has shut hundreds of small polluters in sectors like ceramics and cement, and tried to attract industries like solar panels and electric vehicles by offering incentives and building sprawling new industrial parks.
However, it has struggled to compete with numerous Chinese cities making similar bets, especially as China’s economy slows.
And the results of the anti-pollution efforts have been mixed.
Steel still accounts for more than half of Anyang’s economy – unchanged from a decade ago – and the environment is still bad. The taste of brimstone hangs in the air, and the fairy lights festooned on hundreds of cranes on the city’s skyline could only be dimly seen during a recent visit.
Part of the problem, according to Liu Bingjiang, who heads the Ministry of Ecology and Environment’s air pollution office, is that smog is also blowing in from neighboring industrial regions, undermining local cleanup efforts.
“All these measures, all these plans are in place, but it still can’t solve the smog,” said Li, the steel mill owner.
A SLOWING CHINESE ECONOMYReuters reporters travelled to six cities across Henan, from bustling Zhengzhou to the smog-choked industrial hub of Anyang in the north, interviewing dozens of residents from all walks to life to document how the economic slowdown feels in the heart of China.
SHUTTING DOWN THE BOOTMAKERS
The anti-pollution campaign is also hitting much smaller industrial centers.
Sangpo, a dusty two-street village in northeast Henan, used to live off scores of sheepskin processing factories cranking out winter boots modeled on UGG, the American brand with Australian roots.
While the industry was the main employer in the village, that came with a heavy environmental cost: treating the raw sheepskin consumed copious amounts of water and contaminated the local water supply.
Last July, the government moved to close most of the factories, sending dozens of police cars into Sangpo with sirens wailing to enforce the shutdown.
Government inspectors were installed to keep watch at each factory to ensure compliance with the order. Three factory owners were arrested for violating environmental regulations.
During a visit to Sangpo by Reuters, most factories were idle during what should have been peak production season. Hundreds of workers had left town in search of work elsewhere, leaving behind shuttered shopfronts and deserted roads.
“The village is at a tipping point,” said a former factory owner who only wanted to be identified by his surname, Ding. Most businesses were mostly “more dead than alive,” he added.
Before the factories were shut, the village of 6,500 people, mainly from the Hui Muslim minority, had been punching well above its weight.
It achieved national recognition as a thriving model of e-commerce, winning glowing write-ups in national newspapers after it was named in 2015 by the tech giant Alibaba as central China’s very first “Taobao village” – a designation for top rural sellers on the company’s internet retailing platform.
But that all changed last year as China’s pollution crackdown intensified. The top county-level official, factory owners said, held a town hall meeting and threatened to shut everyone down permanently. A deal was made for 19 of the 135 factories to remain.
Those wanting to stay open agreed to upgrade their businesses and invest in equipment to ensure they met water treatment standards. Factories that opted out were shut, their boilers and processing equipment destroyed.
The government of Mengzhou, which oversees Sangpo, declined to comment when reached by phone. But Mengzhou’s mayor said last year that the crackdown was necessary and in accordance with the popular will, according to a statement on the Mengzhou government website.
Sangpo village’s party chief declined to comment when reached via the Chinese messaging app WeChat. Calls to his cellphone went unanswered.
The county government’s plan is to corral remaining factories into a new industrial zone by the end of the year. But remaining business owners are worried about the slow pace of construction and fear they will be forced to shut.
Ding, the former factory owner, said business owners didn’t expect the crackdown – which has also discouraged lending from banks - to be so harsh.
“Everyone in the village was moaning and sighing but no one thought it would be this extreme,” Ding said. ”We are at our wits’ end.”
TEHRAN- National Iranian Oil Company (NIOC) is going to set new guidelines for holding the 10th round of crude oil offering at Iran Energy Exchange (IRENEX), IRNA reported.
After two unsuccessful offerings of light crude oil in the new Iranian calendar year (started on March 21), NIOC decided to halt the process to prepare new guidelines for the new fiscal year and then resume the offerings.
Accordingly, for the 10th round NIOC is going to offer two million barrels of light crude at the base price of $67.28 on May 21.
In the previous round, NIOC offered one million barrels of crude oil at the base price of $63.36. Like the previous rounds, the least amount of sales was 35,000 barrels.
NIOC offered crude oil at IRENEX first on October 28, 2018 just few days before new U.S. sanctions on Iran’s petroleum sector took effect (November 4). In the first round, NIOC could sell some 280,000 barrels of crude oil at $74.85 per barrel. With the daily supply amount of one million barrels, the market wrapped up by selling eight 35,000-barrel cargos of oil on the day.
Since the U.S.’s withdrew from Iran’s nuclear pact in May 2018, vowing to drive Iran's oil exports down to zero, the Islamic Republic has been taking various measures to counter U.S. actions and to keep its oil exports levels as high as possible.
One of the main strategies that Iran chose to execute to help its oil exports afloat has been trying new ways to diversify the mechanism of oil sales, one of which is offering oil at the country’s stock market.
Tehrantimes
Saber-rattling in the Middle East and the continued deterioration in Venezuela have once again trumped considerations such as supply and demand in the fluctuations of global oil prices. Despite what looks like still ample global supply, both Brent crude and West Texas Intermediate have risen this week on the back of geopolitical fears.
The highlight of the week in this respect was no doubt the sabotage of four vessels off the Emirati coast that U.S. authorities said may have been caused by Iran. The sabotage reports were followed by reports of a Houthi attack on two Saudi oil facilities. Meanwhile the U.S. sent an aircraft carrier to the Middle East in what was overwhelmingly perceived as the next step in an escalation between Washington and Tehran.
This would have been enough to push prices a lot higher in just a couple of days as fears about supply from the Middle East are perhaps the most traditional of bullish factors for prices. However, this time the increase has been limited and this is because although they have been receiving less attention, oil fundamentals remain on the scene and they seem to be bearish for benchmarks right now although the situation remains highly volatile and this is working in bulls’ favor.
Take Venezuela, for example. According to OPEC’s latest Monthly Oil Market Report, Venezuela’s oil production surprisingly inched up in April, to 768,000 bpd from 740,000 bpd in March. However, a PDVSA report seen by S&P Global Platts has revealed that since the start of May, production has slumped by as much as 77 percent to 169,800 bpd because of the lack of tankers to carry the crude.
"The US sanctions have impacted the international market and have increased the cost of freight to Venezuela, the availability of shipowners to provide such services and the final cost of the products, placing PDVSA in an unfavorable and weak negotiating position," another report said. Related: U.S. Oil Rig Count Dips To 14-Month Low
There is also Libya, where the fight between the Libyan National Army of U.S.-backed General Khalifa Haftar and the UN-recognised Government of National Accord has reached a stalemate but it can yet affect oil production, which for the time being has been spared any new outages.
Yet on the other hand there is news from Canada that several oil producers will expand production this year despite pipeline constraints; assurances from Saudi Arabia and the UAE they would be happy to cover for any loss in Iranian oil; and, of course, booming oil production in the U.S., where, according to Rystad Energy, shale is now the second-cheapest source of new oil supply. That, combined with lower oil demand expectations from the International Energy Agency has been enough to keep a lid on prices, preventing a major spike and a consequent slump in demand.
That said, the oil market loves to fear wars and supply disruptions. This means that despite the fundamental factors that would suggest prices should be lower, the coming weeks would likely bring more uncertainty and more price rises until the dust settles in the Middle East or – always a possibility in the region – the situation escalates further and so do oil prices.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Major crude producers are set to meet on Sunday to discuss how to stabilise a volatile oil market amid rising tensions between the United States and Iran in the Gulf, which threaten to disrupt supply.
Key OPEC members and other major suppliers, including Russia, will assess the oil market and examine compliance to production cuts agreed late last year.
But the subject of Iran, which is not present, will dominate the one-day meeting of the OPEC+ group, formed by OPEC members and its new petro allies.
The meeting comes days after "sabotage" attacks against tankers in highly sensitive Gulf waters and a drone attack on a Saudi pipeline by Houthi rebels from Yemen.
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The meeting also comes as the full impact of reinstated US sanctions against Tehran kicks in, slashing the Islamic Republic's crude exports.
Hours before the meeting in Jeddah, host Saudi Arabia said it does not seek war with Iran but is ready to defend its interests.
The meeting is set to make recommendations ahead of a key OPEC summit in late June, to be attended by Iran.
President Donald Trump said last month that Saudi Arabia and other OPEC members had agreed to his request to boost oil production in order to tamp down rising prices.
Massive drops in exports by Iran and Venezuela plus output cuts of 1.2 million barrels per day, implemented by the OPEC+ group since January, have cut supply.
But UAE Energy Minister Suheil al-Mazrouei said inventories were still building up.
He told reporters Saturday that the job of balancing the market was not yet complete, a hint that any ramp-up in production could send prices crashing as they did in late 2018.
Iran exports tumble
OPEC and the International Energy Agency said earlier this month that global oil supply fell in April due to tightened US sanctions on Iran and OPEC+ production cuts.
The IEA said Iranian crude production fell in April to 2.6 million bpd, down from 3.9 million before Washington announced in May 2018 it would withdraw from the 2015 Iran nuclear deal and re-impose sanctions.
Iran's output is already at its lowest level in over five years, but could tumble in May to levels not seen since the devastating 1980-1988 Iran-Iraq war.
Energy intelligence firm Kpler sees Iranian exports plunging from 1.4 million bpd in April to around half-a-million barrels in May - down from 2.5 million in normal circumstances.
Venezuela's output is also tumbling, down by over half since the third quarter of last year.
Kpler says data shows OPEC+ members have kept to agreed production cuts.
But exporters fear a rush to raise production to plug the gap left by Iranian exports could backfire, triggering a new supply glut.
Gulf tensions
Sunday's meeting comes amid soaring Gulf tensions after the tanker "sabotage" and the drone attacks on a key Saudi crude pipeline.
Both attacks targeted routes built as alternatives to the Strait of Hormuz, the conduit for almost all Gulf exports.
Iran has repeatedly threatened to close the strait in case of war with the US, which announced this month it was sending an aircraft carrier and strike group to the region.
Saudi Arabia accused Iran of ordering the pipeline attacks, targeting "the security of oil supplies... and the global economy".
Adel al-Jubeir, Saudi minister of foreign affairs, said Sunday his country does not want war with Iran, but was ready to defend its interests.
Saudi Arabia called on Saturday for urgent meetings of the Gulf Cooperation Council and the Arab League to discuss escalating tensions, government news agency SPA said.
It also said Crown Prince Mohammed bin Salman had spoken with US Secretary of State Mike Pompeo about enhancing security in the region.
Pakistan wouldn't need to import oil after reserves were found off Karachi coast, Imran Khan had said.
Pakistan Prime Minister Imran Khan's dream of the cash-strapped country becoming self-sufficient in oil has been dashed after no reserves were discovered in the Arabian Sea off the Karachi coast, media reports said Sunday.
The drilling work at Kekra-1 well in deep sea near Karachi has been stopped after no oil or gas reservoir could be found, according to Special Assistant to Prime Minister Khan on Petroleum Nadeem Babar.
Pakistan was hopeful of finding large oil and gas reserves in its territorial waters in the Arabian Sea. US oil giant Exxon Mobil, Italy's ENI and a couple other companies were involved in drilling an ultra-deep oil well.
Mr Babar told Geo News that the process of drilling up to more than 5,500 meters was completed on Kekra-1 (Indus G-Block) off Karachi coast.
Mr Babar said the office of DG Petroleum Concessions has been apprised of the results of drilling.
He said that the cost of drilling project, which has now been abandoned, remained over $100 million.
In March, Mr Khan had said Pakistan would not need to import oil after reserves were found near Karachi coast.
"We are hopeful of finding large reserves of gas and oil in the sea near Karachi. The nation should pray for this and I will soon share good news regarding this," Mr Khan had said.
"God willing the reserves will be so large that we will not need to import any oil," he said.
Mr Khan said he believes that if big oil reserves are discovered, most of Pakistan''s economic problems will be addressed and then there will be no stopping in the country's progress.
Around four months ago, Italian firm ENI, the operator of the Kekra-1 offshore block, started drilling in a joint venture with US firm ExxonMobil, one of the world''s largest oil and gas firm, and the Pakistan state-owned Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL).
Each of the four firms has a 25 per cent participating interest in the block.
The drilling was carried out in ultra-deep waters some 280 kilometres away from the Karachi coast.
The well was spudded on January 13 this year, targeting a carbonate reservoir with a prognosed total depth of 5,660 metres.
Some surveyors had found the block 'Indus-G' similar to the Indian offshore Bombay High oilfield, which produces 350,000 barrels per day of crude oil, while others described it as similar to the ones in the oil- and gas-rich Kuwait, the Express Tribune reported.
At the same time, officials say, oil and gas exploration and production is described as a "high risk- high reward" business and the failures should not be taken as a loss. "India found offshore reserves from its 'Bombay High well' after 40 attempts," the officials were quoted as saying by the Dawn News.
OGDCL spokesman Ahmed Lak said that Pakistan should continue its efforts to find hydrocarbon reserves because there was a large area where reserves had been predicted by experts.
"US firm ExxonMobile has become a working partner in the block only because of encouraging data," he said, adding that international researches had shown that hydrocarbon reserves were found in the sea facing the river basins.
"Since Indus is an ancient river with a large basin, experts do not contest the views there is a huge pocket of hydrocarbon reserve in the Arabian Sea off Sindh," Mr Lak said.
"Because the well remained dry, now it will be plugged and abandoned," said Mr Lak.
Currently, Pakistan meets only 15 per cent of its domestic petroleum needs with crude oil production of around 22 million tonnes; the other 85 per cent is met through imports.
Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on ndtv.com/elections. Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections. Election results will be out on May 23.
South Korean shipbuilder Daewoo Shipbuilding Marine and Engineering (DSME) has this week hosted a naming ceremony for the Sonangol Quengela drillship.
Upon delivery, the seventh generation drillship will be operated by Sonadrill, a joint venture recently established by drilling contractor Seadrill, and an affiliate of Sonangol E.P.
Sonadrill will operate four drillships, two supplied for Seadrill’s fleet, and two – Quengela and Libongos – supplied by Sonangol. The drillships will be focused on opportunities in Angola waters.
The Quengela and Libongos drillships were ordered by Sonangol from DSME back in 2013 with delivery originally scheduled for 2016.
However, the Angolan state-owned oil company balked at full payment as its financial situation worsened amid a fall in global oil prices and the drillship were not delivered under the original schedule.
The two companies resolved their differences late in 2018 and made plans for delivery of two drillships in early 2019.
The Quenguela drillship is expected to leave the DSME yard in June, while the Libongos had already left more than two months ago, and, according to AIS data, is currently at anchor in Singapore.
Offshore Energy Today Staff
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"Had we concluded we would have signed a heads of agreement," he said, referring to a preliminary document that would set out terms of cooperation on the South Integrated Project. "But now they are out of the country, why should I run after them?" he said at an oil meeting in Jeddah.
Iraqi oil officials say Exxon evacuated all of its foreign staff from the West Qurna 1 field on Friday and Saturday, about 60 people. The U.S. oil major has a long term contract to improve the field.
Its evacuation came days after Washington sent non-essential staff home from the U.S. embassy in Baghdad over what it said was a security alert caused by threats from Iran, which has close ties to Shi'ite militia groups operating in Iraq.
The United States is ramping up sanctions pressure on Iran, especially over oil exports. Iraq relies heavily on natural gas from Iran for its electricity supply, which is stretched during hot summer months.
Ghadhban said there were a number of ways Iraq could compensate in case Iranian gas supplies were reduced, including using gas oil stores in some power plants, but so far there had been no change in supplies.
Ghadhban separately said Iraq has almost 5 million barrels per day of oil capacity, with a current surplus capacity of around 400,000 bpd
"We are [producing] around 4.5 mln bpd, which is our production rate that we agreed to in December last year," he said.
(Reporting by Stephen Kalin in Jeddah; Writing by Lisa Barrington; Editing by Peter Graff)
Baker Hughes BHGE, -0.30% on Friday reported that the number of active U.S. rigs drilling for oil fell by 3 to 802 this week. That followed a decline of 2 rigs the previous week. The total active U.S. rig count, meanwhile, also fell by 1 to 987, according to Baker Hughes.
Germany’s industry group MWV on Friday said there were no shortages of gasoline or diesel arising from the crisis due to the contamination of crude oil on Russia’s Druzhba pipeline, but warned of challenges if there was no improvement.
The eastern German refineries Schwedt and Leuna were receiving alternative oil tanker shipments via the Baltic Sea ports of Rostock and Gdansk, but the volumes were lower than those normally arriving via Druzhba, a spokesman said.
“It is clear that without a change to the situation, mineral logistics are becoming an increasing challenge for our member companies and a burden to the supply system,” he said in reply to an enquiry.
Russia halted oil flows last month, contributing to a rise in global prices.
Saudi Aramco will supply Indian Oil Corp Ltd an extra 2 million barrels of crude every month during July-December, an executive of the state-run Indian company said on Friday, as New Delhi looks to make up for the loss of supplies from Iran due to U.S. sanctions.
Last month, Saudi Arabia approached Indian buyers offering them additional supplies to compensate for loss of Iranian oil after the United States’ sanctions kicked in.
The United States had imposed new sanctions on Iran in November last year, but gave a six-month waiver to eight countries, including India, which allowed them to import some Iranian oil.
Indian Oil has a term deal to buy 5.6 million tonnes from Saudi Aramco in 2019/20 and an option to buy additional 2 million tonnes.
“We have told them we will be taking 2 million barrels every month for six months from July (about 1.6 million tonnes in total) and they have agreed,” said A K Sharma, Indian Oil’s director (finance).
Oil rose to multi-week highs on Monday after OPEC indicated it will likely maintain production cuts that have helped support prices this year, while tensions continued to escalate in the Middle East.
Saudi Energy Minister Khalid al-Falih said on Sunday there was consensus among the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers to drive down crude inventories “gently” but he would remain responsive to the needs of a “fragile market.”
United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei earlier told reporters that producers were capable of filling any market gap and that relaxing supply cuts was not “the right decision.”
Meanwhile, U.S. President Donald Trump threatened Tehran on Sunday, tweeting that a conflict would be the “official end” of Iran, while Saudi Arabia said it was ready to respond with “all strength” and that it was up to Iran to avoid war.
The rhetoric follows last week’s attacks on Saudi oil assets and the firing of a rocket on Sunday into Baghdad’s heavily fortified “Green Zone” that exploded near the U.S. embassy.
“Al-Falih and the UAE both put paid to suggestions of increasing production over the weekend and then President Trump essentially telling Iran to bring it on, was a perfect short-term storm for oil prices,” Greg McKenna, strategist at McKenna Macro, told Reuters by email.
OPEC, Russia and other non-member producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months to prevent inventories from increasing and weakening prices.
“This second half, our preference is to maintain production management to keep inventories on their way declining gradually, softly but certainly declining toward normal levels,” al-Falih told a news conference after OPEC and other producers met.
Russian Energy Minister Alexander Novak earlier said an easing of cuts had been discussed and the supply situation would be clearer in a month, including from countries under sanctions.
Residents of Nikolayevka haven’t had much to gossip about since the owner of the vodka museum over on People’s Friendship Street died, forcing the closure of the only tourist attraction in town.
But now that this hardscrabble village in central Russia has emerged as the epicenter of an international oil scandal, they say they knew all along that something bad was about to happen.
It’s here, just east of a looping bend in the Volga River, that authorities say corrosive chlorides entered Russia’s 40,000-mi network of oil pipelines, causing the first-ever shutdown of the main export artery to Europe. President Vladimir Putin was quick to lash out at national operator Transneft, saying April 30 that the crisis was causing “huge” damage. Eight days later, investigators blamed a band of black marketeers working in concert with a local company that had access to Transneft’s system through feeder lines in Nikolayevka.
Valya Martinenko, 72, can clearly see the depot where the contamination is alleged to have occurred from the backyard of the little blue cottage she’s lived in her whole life. She said the tanker-truck traffic that used to wake her up at all times of day and night mysteriously stopped more than a month ago.
“I don’t miss them,” she said as chickens pecked along a road nearby. “They only kicked up dust. And that place never hired locals anyway.”
Russia’s Investigative Committee accuses the group of stealing at least $15,400 (1 million rubles) of pipeline-ready oil, covering their tracks by replacing it with a similar volume of a liquid mixture consisting of raw crude and organic chlorides.
The scheme lasted about 10 days and ended up tainting as much as 5 MMt of exports through the Druzhba link to Belarus and beyond, affecting refineries throughout Eastern Europe. That includes at least 1.6 million tons shipped out of the Ust-Luga terminal on the Baltic, most of which is still at sea, data compiled by Bloomberg show.
The node in Nikolayevka, now a crime scene, had a capacity to move as much as 40,000 t/month, or about 1,300 t/day. That means that each ton of dirty crude may have ended up contaminating almost 400 t of oil already in the network.
“This is a story about greed and small-time fraud colliding with incompetence and a lack of control over what goes in the pipe,” Bloomberg oil strategist Julian Lee said.
A spokesman for Transneft declined to comment.
At least four of the six suspects sought by the Investigative Committee have been taken into custody. They include a woman who’s the nominal owner of the company that controls the depot in Nikolayevka.
The facility’s former owner, Roman Trushev, said he sold the depot last year, according to Kommersant. Trushev, who’s wanted for questioning in Russia, told the newspaper that he was in Germany when the scandal erupted and cancelled plans to return to Moscow.
Transneft chief Nikolay Tokarev, who served in the KGB with Putin in Dresden during the Cold War, said in his meeting with the president that the company has about 150 collection points around the country similar to those supplied by Nikolayevka. Most of them, he said, are run by large oil companies.
Diluting the contaminated oil could take several months and cost Transneft more than $370 million, according to Citigroup Inc. analyst Ronald Smith. The spoiled crude may need to be mixed with clean supplies to avoid damaging refineries.
“Transneft was caught off guard because, well, this has never happened before,” Vitaly Yermakov, an oil expert at the Oxford Institute for Energy Studies, said from Moscow.
Deputy Prime Minister Dmitry Kozak said Transneft will foot the bill for any physical damage suffered by its partners in Belarus, Poland and elsewhere as a result of the dirty flows. The final figure will likely be below $100 million, according to Energy Minister Alexander Novak.
Trushev, the former owner, told Kommersant the depot is too small to account for all the tainted crude. Transneft tests for contaminants every 10 days, so if Nikolayevka was the only source of the dichloride then the concentration must have been extraordinarily high, according to Rustam Tankaev, head of the Infotek-Terminal consultancy in Moscow.
“Major oil companies don’t even touch the stuff because it is stone-age technology, and the small producers that do use it don’t have the capacity to wreak such havoc,” Tankaev said. “So if it wasn’t an accident, it seems likely it was an intentional act.”
Back in the village, Elena and Valery, a couple in their 50s, said they knew something was wrong when the facility changed hands and the new owners stopped interacting with the locals. They said the old management was generous, building a church and donating presents to the school during the holidays.
“But we didn’t get a thing out of the new management,” he said.
قال محافظ طهران أنوشيروان محسني بندبي: ان ايران وتركيا تمتلكان طاقات اقتصادية عالية بما يستدعي زيادة حجم التبادل التجاري بين البلدين.
ونوه محسني بندبي، خلال اللقاء مع السفير التركي في طهران السبت، بالإمكانيات والطاقات المميزة التي تتمتع بها ايران في مختلف المجالات الصناعية والزراعية والنفط والغاز والطاقة؛ وبما يمكنها من النهوض بمستوى التبادل التجاري الذي يبلغ حالياً 8 مليارات دولار مع تركيا.
محافظ طهران أشار الى أن تركيا تشكل إحدى الوجهات السياحية بالنسبة للرعايا الايرانيين؛ مؤكداً في المقابل على ضرورة تحفيز السياح الأتراك للتوجه الى الجمهورية الاسلامية الايرانية. وتابع: انه يمكن من خلال تحديد وإزالة العقبات المحتملة من مسار العلاقات التجارية الثنائية، العمل على زيادة وتوسيع نطاق التعاون الاقتصادي وصولاً الى القيمة المنشودة وقدرها 30 مليارد دولار بين البلدين.
من جهته، أكد سفير تركيا لدى طهران على رغبة التجار والمستثمرين الأتراك في دخول السوق الايرانية، قائلاً: إن تيسير الظروف وإزالة العقبات من مسار التجار الأتراك يحفزهم على التوجه الى الأسواق الإيرانية.
وأضاف دريا أورس في تصريح للمراسلين على هامش لقائه محافظ طهران: ان للتجار الأتراك تواجد جيد في ايران لاسيما في منشآت (رازي) و(بارس) و(حيات) البتروكيماوية. وأشار سفير تركيا الى المباحثات الجارية بين حكومتي البلدين حول تنمية التجارة الثنائية وتسهيل عمليات الاستثمار فيهما؛ معلناً عن انعقاد اجتماعات اللجنة الاقتصادية المشتركة بين ايران وتركيا الخريف القادم والتي سيتم فيها البحث في سبل تنمية العلاقات التجارية والاقتصادية والسياحية بينهما.
وأشار أورس الى العلاقات السياحية بين البلدين، وقال: ان ايران بلداً حضارياً وفيه العديد من الأماكن الأثرية والطبيعة الجميلة التي تستقطب السواح الأتراك إليها. وأضاف: ان العلاقات التركية-الايرانية قوية وعريقة في جميع المجالات الاقتصادية والاجتماعية والعلمية والسياسية؛ مؤكداً ضرورة تنميتها أكثر فأكثر.
al-vefagh
تعرب المؤسسة الوطنية للنفط عن إدانتها الشديدة للهجوم الإرهابي الذي شُنّ صباح هذا اليوم على مقربة من حقل زلة النفطي.
ووفقا للتقييمات الأمنية في المنطقة، فقد قام عدد من المتطرفين بمداهمة البوابة الرئيسية الواقعة بين مدينة زلة وحقل زلة النفطي، الذي تشرف على تشغيله شركة الزويتينة للنفط التابعة للمؤسسة الوطنية للنفط. وقد أسفر الهجوم عن مقتل ثلاثة أشخاص، من بينهم مواطن ليبي. كما تعرب المؤسسة الوطنية للنفط عن بالغ أسفها للخسائر المسجلة في الأرواح البشرية، وتتوجّه بأحر التعازي إلى عائلات الضحايا.
وتجدر الإشارة إلى أنّه لم يكن لهذا الحادث أي تأثير مباشر على سير العمليات. وقد قامت إدارة المؤسسة الوطنية للنفط بعقد اجتماع طارئ لمراجعة البروتوكولات الأمنية، مطالبة بأن يتّخذ حرس المنشآت النفطية بالمنطقة التدابير الوقائية اللازمة.
وقد ندّد رئيس مجلس إدارة المؤسسة الوطنية للنفط، المهندس مصطفى صنع الله، بهذا الهجوم، محذّرا من المخاطر التي تهدّد قطاع النفط الليبي جرّاء الأعمال العدائية القائمة. حيث صرّح قائلا: " إنّ المؤسسة الوطنية للنفط تدين بشدّة الهجوم الذي شُنّ اليوم، والذي كان من شأنه أن يهدّد حياة موظفي قطاع النفط، ويعرّض منشآته إلى الخطر. إنّ هذه الحادثة تؤكّد هشاشة الوضع الأمني في بلادنا، وتشدّد على الحاجة إلى وقف إطلاق النار فورا. لقد تسببت الأعمال العدائية الراهنة في فراغ أمني لا يخدم إلا مصالح المتطرفين الذين يسعون إلى نشر المزيد من الفوضى في كافّة أرجاء ليبيا".
وتدين المؤسسة الوطنية للنفط كلّ أشكال الصراع وما يترّتب عنها من زعزعة لثقة المستثمرين الدوليين، وتقويض للمساعي الرامية إلى النهوض بقطاع الطاقة.
18 مايو 2019
طرابلس
Saber-rattling in the Middle East and the continued deterioration in Venezuela have once again trumped considerations such as supply and demand in the fluctuations of global oil prices. Despite what looks like still ample global supply, both Brent crude and West Texas Intermediate have risen this week on the back of geopolitical fears.
The highlight of the week in this respect was no doubt the sabotage of four vessels off the Emirati coast that U.S. authorities said may have been caused by Iran. The sabotage reports were followed by reports of a Houthi attack on two Saudi oil facilities. Meanwhile the U.S. sent an aircraft carrier to the Middle East in what was overwhelmingly perceived as the next step in an escalation between Washington and Tehran.
This would have been enough to push prices a lot higher in just a couple of days as fears about supply from the Middle East are perhaps the most traditional of bullish factors for prices. However, this time the increase has been limited and this is because although they have been receiving less attention, oil fundamentals remain on the scene and they seem to be bearish for benchmarks right now although the situation remains highly volatile and this is working in bulls’ favor.
Take Venezuela, for example. According to OPEC’s latest Monthly Oil Market Report, Venezuela’s oil production surprisingly inched up in April, to 768,000 bpd from 740,000 bpd in March. However, a PDVSA report seen by S&P Global Platts has revealed that since the start of May, production has slumped by as much as 77 percent to 169,800 bpd because of the lack of tankers to carry the crude.
"The US sanctions have impacted the international market and have increased the cost of freight to Venezuela, the availability of shipowners to provide such services and the final cost of the products, placing PDVSA in an unfavorable and weak negotiating position," another report said. Related: U.S. Oil Rig Count Dips To 14-Month Low
There is also Libya, where the fight between the Libyan National Army of U.S.-backed General Khalifa Haftar and the UN-recognised Government of National Accord has reached a stalemate but it can yet affect oil production, which for the time being has been spared any new outages.
Yet on the other hand there is news from Canada that several oil producers will expand production this year despite pipeline constraints; assurances from Saudi Arabia and the UAE they would be happy to cover for any loss in Iranian oil; and, of course, booming oil production in the U.S., where, according to Rystad Energy, shale is now the second-cheapest source of new oil supply. That, combined with lower oil demand expectations from the International Energy Agency has been enough to keep a lid on prices, preventing a major spike and a consequent slump in demand.
That said, the oil market loves to fear wars and supply disruptions. This means that despite the fundamental factors that would suggest prices should be lower, the coming weeks would likely bring more uncertainty and more price rises until the dust settles in the Middle East or – always a possibility in the region – the situation escalates further and so do oil prices.
By Irina Slav for Oilprice.com
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Carlyle Group LP is in discussions with three companies that operate pipelines and terminals to sell a 25% stake in its Corpus Christi, Texas, crude oil export terminal for $625 million, according to a source familiar with the matter.
Carlyle is also in talks with the three companies to jointly operate a crude oil pipeline from Houston to Corpus Christi, the source said. The identities of the companies could not be immediately learned.
Carlyle and other companies are working to open at least eight facilities to export U.S. crude oil to global markets from the U.S. Gulf Coast. The United States is now producing more than 12 million barrels per day (bpd), more than Saudi Arabia and Russia. Last week, U.S. crude exports were near a new record at nearly 3.4 million bpd.
A deal with one of the three companies, which operate facilities in Houston, could happen as early as Friday, according to the source.
The joint-venture pipeline would carry crude from Houston to Corpus Christi with an estimated capacity of between 700,000 to 1.2 million barrels per day (bpd), the source said.
It would provide alternate access to U.S. oil producers. Carlyle’s facility has existing connections to producers in the Eagle Ford and the Permian Basin, two of the largest U.S. oil fields.
Carlyle-backed Lone Star Ports LLC is proposing a 1.4 million bpd export facility on a harbor island near Corpus Christi. It has said it expects to begin operations at the facility in October 2020.
Lone Star Ports and its partner, the Port of Corpus Christi, have filed for permits to build a deepwater port that could handle tankers carrying up to 2 million barrels of oil.
Russia's Energy Minister Novak says too soon to discuss oil-cut options
By Dina Khrennikova, Grant Smith and Salma El Wardany on 5/19/2019
MOSCOW, LONDON and CAIRO (Bloomberg) -- Oil producers meeting in Saudi Arabia, must assess the situation in the market before considering possible action such as extending output cuts, Russia’s Energy Minister Alexander Novak told reporters in the Red Sea city.
Members of the OPEC+ coalition need to study their progress in cutting oil production over the past four months, he said. Novak said he plans to meet for one-on-one talks with his Saudi counterpart, Khalid Al-Falih.
Kazakhstan Sees Decision on Oil-Cut Deal in June (12:04 p.m.)
Kazakhstan expects OPEC+ to make a decision on whether to continue or adjust oil output curbs in June, the country’s Deputy Energy Minister Magzum Mirzagaliyev told reporters in Jeddah, Saudi Arabia.
The group will monitor the market and inventory levels over the next month, Mirzagaliyev said. Global crude stockpiles are declining slower than expected despite the deeper-than-agreed cuts by OPEC+ producers, he said.
OPEC, Allies Convene in Saudi Arabia to Talk Oil (11.45 a.m.)
Oil ministers from OPEC and its allies are in the Saudi Arabian city of Jeddah to discuss how their collective production cuts are impacting the market. The meeting starts Sunday at 4 p.m. local time.
OPEC, Allies Get Back on Track With Oil Cuts
Producers in the so-called OPEC+ alliance pumped less crude in April than their agreed limit for the first time in 16 months. With output cuts expiring at the end of June, talks are likely to focus on events that could affect global oil supplies, such as U.S. sanctions on Iran, unrest in Venezuela, inventories and recent attacks on Saudi tankers and a pipeline.
OPEC+ Job Isn’t Done With Oil Inventory Rising (2:40 a.m.)
Efforts by the Organization of Petroleum Exporting Countries and its allies to balance the global supply and demand of oil aren’t complete because crude inventories continue to rise, according to United Arab Emirates Oil Minister Suhail Mohammed Al Mazrouei.
OPEC will fill any supply gaps that may emerge from tighter sanctions on Iran, Al Mazrouei said. “If there is a need to attend to any shortage in the market we will do it, but we don’t see that.”
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FROM THE ARCHIVE ///
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Petroleum exports from Russia to the U.S. are growing rapidly as the supplier takes advantage of lost deliveries from sanctions-hit Venezuela and supply cuts by OPEC members.
In the first half of May, 13 ships from Russia delivered almost 5 million barrels of crude and oil products, according to a report by Caracas Capital Markets managing partner Russ Dallen. More supplies are en route, with American refiners set to triple their monthly intake of Russian crude, the largest foreign producer outside of OPEC. "Lately, Russian shipments coming to the U.S. seem to be on steroids."
From Russia With Love Growing shipments of Urals crude to the U.S. as Venezuelan supply ebbs U.S. Customs data
Through February, U.S. buyers received over 16 million barrels of crude and products, compared about 20 million for the same period last year. For all of 2018, shipments were about 137 million, according to EIA data.
For more on Venezuela’s falling output, click here
US shale operators are on course to increase oil production significantly in 2019. The growth in US onshore production from the first quarter through the fourth quarter could come in at around 1.1-1.2 million barrels per day (bpd), or 16% for the full year, according to Rystad Energy.
After a paltry first quarter, depressed by weather effects, US shale players have over the past weeks assured investors that they will achieve previously communicated production targets, as well as demonstrate excellent capital discipline and cost control.
“Despite temporary challenges faced in the beginning of the year, E&P companies are set to deliver on their original production and capital targets, with some being well positioned to perform above initial expectations. US shale players can still be expected to deliver around 16% oil growth in 2019. Several operators have in fact raised their production guidance for the remainder of the year,” says Veronika Akulinitseva, senior analyst at Rystad Energy.
Rystad Energy has analyzed the first quarter results of around 50 US shale operators. The results indicate that US producers, on average, saw a slowdown in oil production growth in the first quarter. Output grew by 0.1% relative to the fourth quarter of 2018.
“The slow first quarter implies an even steeper expected growth curve for the remainder of the year. In fact, acceleration of oil production for many operators is already underway and oil additions are thus likely to increase notably already in the second quarter of 2019,” Akulinitseva remarked.
The Canadian operator Enerplus was the player that raised its oil guidance the most, expecting 10% higher volumes than originally guided. It said growth is already underway and the company is aiming to generate a double-digit rise in production already in the second quarter. Likewise, SRC Energy, an independent operator in the Denver-Julesburg basin, raised its oil target by 7%, attributing the adjustment to overly conservative original guiding.
By Rystad Energy
More Top Reads From Oilprice.com:
Russia's open to relaxing OPEC+ cuts as Saudis urge restraint
By Annmarie Hordern and Dina Khrennikova on 5/20/2019
LONDON and MOSCOW (Bloomberg) -- From easing the limits to ending the extreme throttling-back that has seen some countries exceed original cutback targets, Russia sees a range of options that would allow OPEC+ to continue output cooperation until year-end.
"One of the options we discussed today is removing the over-compliance, a return to the parameters of the current agreement," Russian Energy Minister Alexander Novak said Sunday in an interview with Bloomberg TV in Jeddah, Saudi Arabia, after a producer group meeting. OPEC+ may need "to tweak the parameters to a certain extent" if monitoring shows full compliance is not enough to prevent a market deficit, he said.
As the Organization of Petroleum Exporting Countries and its allies gathered over the weekend to discuss the future of the output-cuts pact, Russia was the only member of the group that did not rule out a relaxation of the cuts. Most other nations including the de facto leader, Saudi Arabia, have signaled they prefer extending the current deal until year-end.
If Russia’s support to ease the restrictions strengthens over the next several weeks, OPEC+ may find it difficult to reach a consensus over extending the agreement at the ministerial meeting in June when the current deal expires.
Continuing the OPEC+ pact into the second half of the year with full compliance of all member states would allow for production increases. In April, the group’s total average conformity with the deal reached 168%. Saudi Arabia alone could ramp production up by about 500,000 bopd without breaching its cap, as it has cut output deeper than required.
For Russia, the full-compliance option would be less attractive, adding just several dozens of barrels to the average daily output. The nation has dragged its feet to meet its obligations under the output-cut deal, showing full conformity only since the last days of April. Meanwhile, Russian producers have indicated they are keen to quickly ramp-up output once the current deal expires in June, analysts at IHS Markit Inc. and VTB Capital said last week.
So far, it’s difficult to determine what option would balance the market best due to a range of "black swan" uncertainties, like tougher U.S. sanctions against Iran, Novak said. Russia remains committed to joint effort within OPEC+ and expects that the next several weeks will make it clear what solution to choose, he said.
"What’s important now is that we agree to continue cooperation, and as for the final parameters, they will be decided at the June meeting," he said.
Related News ///
FROM THE ARCHIVE ///
Iranian President Hassan Rouhani speaks during a large gathering on the 40th anniversary of the Islamic Revolution at Azadi Square in Tehran, Iran, on Feb. 11, 2019. (Xinhua/Ahmad Halabisaz)
TEHRAN, May 21 (Xinhua) -- Iran will never bow to the pressures exerted by the United States, Iranian President Hassan Rouhani said on Tuesday.
It was the illusion of the "enemies" to think that they will shatter Iran's steadfastness in development, Rouhani made the remarks in Iran's northwestern West Azerbaijan province.
However, Iran "prospers" and the country develops in the hard time of sanction pressures, he said in a live broadcast from state TV.
"This is a very decisive response to the White House ... and to those who think that they can make Iran surrender under their pressures," Press TV quoted him as saying.
Iran has been under unprecedented sanction pressure by the United States following U.S. President Donald Trump's withdrawal from Iran's nuclear deal in May last year.
Besides, rising tension between Tehran and Washington has put the rivals on the brink of military clashes.
Washington seeks to seal a new nuclear deal with Iran, to further curb Iran's nuclear program, stop Iran's ballistic missile development and brake Iran's push for influence in the region.
Iran has vowed to withstand the pressures and resist the U.S. "bullying policies."
When it comes to getting crude oil to market, bottlenecks have always existed. Back in 2013-15, producers and shippers in the Rockies faced a serious lack of takeaway options. Midstreamers saw the problem and the money to be made, and quickly built more crude-by-rail capacity — and, over time, pipeline capacity — to fix things. Recently, major takeaway constraints emerged in the Permian, much to the detriment of netbacks at the wellhead. There was real concern for a few months that some producers might need to shut in production as there wasn’t any way to get incremental barrels out of the basin. Again, traders and midstream operators got savvy, restarted some dormant crude-by-rail options, initiated long-haul trucking out of Midland, and added more pipe capacity. But what if the next big bottleneck isn’t between two land-based trading hubs? What if there’s not enough export capacity at terminals along the Gulf Coast, the gateway to international markets? In today’s blog, we examine recent export and production trends, and discuss what those could mean for export infrastructure and logistics over the next five years.
U.S. crude oil export volumes have grown substantially since the ban on most exports was lifted in December 2015. Figure 1 shows that by 2017 exports averaged about 1.2 MMb/d, and that in 2018 the export pace increased to about 2 MMb/d. So far in 2019, the volumes being shipped abroad have been averaging just over 2.7 MMb/d, with exports hitting an all-time high of 3.6 MMb/d in February (yellow star to upper-right of bar chart). We’re not even halfway through the year and we’ve already had multiple weeks in 2019 when exports topped 3 MMb/d. Loading that much crude onto huge tankers is no easy task.
Figure 1. Historical Crude Export Volumes. Source: EIA
The rapid growth in exports — the focus of RBN’s xPortCon conference in Houston today (Tuesday, May 21) — has been made possible by the swift rise in U.S. shale production. U.S. output has increased from 8.8 MMb/d at the end of 2016 to 10 MMb/d in 2017, 11.9 MMb/d in 2018, and 12.2 MMb/d in the most recent weekly data from the Energy Information Administration (EIA). But that growth in production could not have occurred without midstream support behind it. Crudes from the Rockies, the Midcontinent, the Permian, and other major basins are now able to reach the Cushing, OK, hub and the Gulf Coast due to dozens of new pipelines that have come online in recent years. Barrels that used to be trapped in small, mid-major trading hubs now can reach a multitude of markets. As we discussed most recently in our Hard Hat and a Hammer series, the Permian has been on the leading edge of pipeline development. In 2018, Midland barrels were trading at a $20/bbl or greater discount to the Gulf Coast due to a severe lack of takeaway capacity. Since the end of last year, several pipeline companies have stepped in to help ease that bottleneck, with a long list of projects that could eventually add as much as 4.5 MMb/d of new capacity from West Texas to the Gulf Coast (orange arrow in Figure 2). Also, growing production from the Bakken and the Denver-Julesburg (D-J) Basin (northeastern Colorado/southeastern Wyoming) is largely targeting the Cushing hub, and midstream groups are looking at adding as much as 2.2 MMb/d of new pipeline capacity from Cushing to the Gulf (lavender arrow) to avoid constraints between Oklahoma and the export terminals.
Figure 2. Proposed Crude Oil Pipeline Capacity to the Gulf Coast. Source: RBN
Production is up, exports are up, and a lot of new pipeline capacity to move crude oil from major production areas to the Gulf Coast is under development. That’s a dream scenario, right? Well, it depends. The Gulf Coast is an inherently superior market because of its optionality. It’s well-connected to pipelines, it has tons of refining capacity, and it offers opportunities to export to premium-priced international markets. But being such a sexy destination begs the question, can Gulf Coast refiners, export docks and ship logistics handle the tsunami of crude that’s headed their way?
On the refiner side, the likely answer is “no.” U.S. refiners have done about as much as they can (and as much as they want) to retrofit themselves to process West Texas Intermediate (WTI) and other light crude oils. Because refiners don’t want to add much more light crude to their refining slates, almost every incremental barrel that comes out of the ground and reaches the Gulf Coast will need to be exported. How much incremental production are we talking about? In RBN’s most recent base-case production forecast, which is fairly conservative (using a $55/bbl WTI value), we expect U.S. crude output to increase by 600 Mb/d per year between now and 2024. Most of that production will be light crude, and those barrels will want to reach the Gulf Coast. As we move from 2019 into 2020 and beyond, export capacity along the coast will need to increase in lock-step with that 600-Mb/d-per-year production growth in order to keep up with the wave of crude oil coming at it. And that, we think, is where a potentially massive bottleneck could emerge.
As we discussed in our Deep Water Drill Down report, there are a number of efforts under way by midstream companies to add new crude oil export capacity along the Texas and Louisiana coasts, including expansions to existing onshore terminals and plans for new offshore terminals. These projects, some of which would be capable of loading 2-MMbbl Very Large Crude Carriers (VLCCs), face their share of challenges, however. For one thing, with so many projects in the race, it’s been tough for developers to line up enough volume commitments to move to a final investment decision (FID). For another, projects of this ilk can face lengthy permitting processes and construction timelines. For export dock capacity to meet the demands of crude oil growth, enough of these projects will have to come online in a timely fashion, or there may well be a severe backlog of crude at the Gulf.
Along with the need to add new terminal capacity, ship logistics and scheduling are also starting to become a point of concern. Traders we have talked to — big and small — have noted that increasing ship traffic in and around Gulf Coast ports has created logjams, thereby lengthening wait times and actually limiting some of the nameplate capacity of these export terminals. It’s similar to a crude-by-rail facility — just because a rail terminal has the storage and operational capacity to hypothetically load and send out one 100-Mbbl train per day, doesn’t mean it always actually handles those volumes. For example, if there’s not enough locomotive power available to move the train out of the facility — or if there is too much rail traffic down the line — a terminal’s usable capacity might be considerably less than its design capacity. Crude oil tankers in some major ports are running into the same issue. These vessels are competing with ships moving other commodities, and the increased traffic in the waterway is limiting how many crude ship movements can be made per day.
If an export-dock bottleneck does rear its ugly head along the Gulf Coast, expect to see prices weaken in a similar fashion to what we most recently saw in the Permian, with an interesting twist. Typically, the WTI Cushing-Brent spread (graph to right in Figure 3) has really been driven by the difference between WTI Cushing and the Gulf Coast (graph to left), and the small, but relatively stable, difference between the Gulf Coast and Brent (middle graph). If the WTI-Gulf Coast spread is, say, $9/bbl, and the Gulf Coast-Brent spread is $2/bbl, the WTI-Brent spread is going to be somewhere around $11/bbl ($9 plus $2).
Figure 3. Crude Oil Price Differentials. Source: Bloomberg
Right now, the bottleneck is between Cushing and the Gulf Coast, and that should ease when the 2.2 MMb/d of new pipeline capacity discussed above comes online over the next two years. Because export volumes haven’t bumped up against total export capacity, there hasn’t been a bottleneck along the Gulf Coast yet, reflective of the very flat Gulf Coast-Brent spread (typically between $2-$4/bbl). But if and when a pinch point develops at the Gulf, the Gulf Coast-Brent spread could quickly become more negative, and push the WTI-Brent spread into more negative territory with it.
All of this is not to suggest a doomsday scenario, but merely to point out that the pace at which export terminal buildouts come to fruition — and how ship traffic congestion gets resolved — will play big roles in determining how quickly export volumes can rise through the 2020s. With so much financial opportunity involved, we expect to see midstream companies and traders come up with innovative solutions. Barrels will find a way to continue to flow, and how that market develops is going to be exciting to watch.
https://rbnenergy.com/gulf-coast-highway-is-the-next-crude-oil-bottleneck-at-the-gulf-coast
Oil prices fell on Wednesday after industry data showed an increase in U.S. crude inventories and as Saudi Arabia pledged to keep markets balanced.
However, analysts said oil markets remained tight amid supply cuts led by producer group OPEC and as political tension escalates in the Middle East.
Brent crude futures were down 36 cents, or 0.5 percent, at $71.82 at barrel by 0414 GMT.
U.S. West Texas Intermediate (WTI) crude futures for July delivery were down 49 cents, or 0.8 percent, at $62.64. The June contract expired on Tuesday, settling at $62.99 a barrel, down 11 cents.
The American Petroleum Institute (API) said on Tuesday that U.S. crude stockpiles rose by 2.4 million barrels last week, to 480.2 million barrels, compared with analysts’ expectations for a decrease of 599,000 barrels. [API/S] [EIA/S]
Official data from the U.S Energy Information Administration’s oil stockpiles report is due later on Wednesday.
Outside the United States, Saudi Arabia on Wednesday said it was committed to a balanced and sustainable oil market.
(بزنيس واير) – أعلن اليوم مجلس القبول في إدارة الدراسات العليا ('جي إم إيه سي')، الرابطة العالميّة لكليّات الدراسات العليا الرائدة في مجال إدارة الأعمال، أنّ 13 كليّة رائدة في مجال إدارة الأعمال في جنوب أفريقيا ونيجيريا تستخدم حاليّاً الاختبار الوطني للقبول في الكليات الطبية ('إن إم إيه تي') من 'جي إم إيه سي' لبرامجهم للدراسات العليا في مجال إدارة الأعمال. وقد أثبت الاختبار الوطني للقبول في الكليات الطبية مكانته بإعتباره التقييم المعتمد لإثبات الجدارة والأهلية وتستخدمه برامج إدارة الأعمال في أفريقيا.
ويتمّ أيضاً استخدام الاختبار الوطني للقبول في الكليات الطبية للمرّة الأولى من قبل كليّات إدارة الأعمال في نيجيريا بما في ذلك: كليّة إدارة الأعمال في لاغوس، وجامعة 'كوفونانت' في نيجيريا، وجامعة 'ريديمر'، وجامعة 'ليد سيتي'، وجامعة 'آفي بابالولا'.
وقال سانجيت شوفلا، الرئيس والرئيس التنفيذي لمجلس القبول في إدارة الدراسات العليا 'جي إم إيه سي'، في هذا السياق: 'إنّ هذا الإنجاز كبير بالنسبة إلى ’جي إم إيه سي‘ ضمن جهودنا لتوحيد الاختبارات الالكترونية المكيّفة في الأسواق الناشئة. وإنّنا ملتزمون بتوفير أفضل تجربة اختبار للمرشحين وتقييم معياري عالي الجودة يسمح للكليات بضمّ أفضل المرشحين الملائمين.'
من جانبه، قال الدكتور يوشينا أوزو، مدير ماجستير إدارة الأعمال في كليّة إدارة الأعمال في لاغوس: 'إنّنا متحمّسون لقبول علامات الاختبار الوطني للقبول في الكليات الطبية كأحد اختبارات الدخول البديلة التي يخضع لها المرشحون في برامجنا لماجستير إدارة الأعمال.'
وشكّل توافر الاختبار خلال العام الدراسي الذي انطلق في 17 مايو 2019 تطوراً كبيراً للاختبار الوطني للقبول في الكليات الطبية في عام 2019. وفي وقتٍ سابق، كان باستطاعة المرشحين أن يتسجلوا ويخضعوا إلى الاختبار ضمن نافذة محددة للاختبار. وعلى الرغم من ذلك وبعد الحصول على انطباعات الأسواق، سيكون الاختبار الوطني للقبول في الكليات الطبية متاحاً للاختبار عند الطلب لغاية 31 ديسمبر 2019.
وقال أرجون رودرا، مدير مساعد لدى جي إم إيه سي' عن منطقة أفريقيا والشرق الأوسط، في معرض تعليقه: 'إنّ هذا الإنجاز مهمّ بالنسبة إلى ’جي إم إيه سي‘ ضمن جهودنا لتوحيد الاختبارات الالكترونية المكيّفة في الأسواق الناشئة. نحن نرغب في تقديم أفضل تجربة اختبار ممكنة إلى المرشحين وتوفير بتوفير التقييم المعياري عالي الجودة الذي يسمح للكليات بضمّ المرشحين المناسبين والتواصل معهم.'
وأكمل رودرا: 'إنّنا ملتزمون بتعزيز الفرص لكلّ من يخضع للاختبار الوطني للقبول في الكليات الطبية في أفريقيا؛ إذ يدعمهم ذلك للتقدّم إلى كليات عدة لإدارة الأعمال باستخدام تجربة اختبار واحدة.'
وتطوّر الاختبار الوطني للقبول في الكليات الطبية في أفريقيا كلّ عام منذ توافره للمرّة الأولى للمرشحين بدءاً من عام 2018. وهذا العام، أضاف جي إم إيه سي' جامعة 'كيب تاون' في جنوب أفريقيا كواحدة من الكليات التي تقبل علامات الاختبار الوطني للقبول في الكليات الطبية.
وقال السيّد سيجران نير، مدير البرامج الأكاديميّة المفتوحة لكليّة الدراسات العليا في إدارة الأعمال في جامعة 'كيب تاون': 'تشجعنا رؤية التطوّر الذي يشهده الاختبار الوطني للقبول في الكليات الطبية في أفريقيا. إذ يقدّم الاختبار قيمة ورؤية كبيرتين إلى المرشحين الأفريقيّين، ويسرّنا أن نقبل حاليّاً علامات الاختبار الوطني للقبول في الكليات الطبية كجزءٍ من عمليّة تقديم الطلب خاصّتنا بدءاً من العام الحالي.'
يستطيع المرشحون أن يدخلوا عبر الرابط الالكتروني: www.nmat.org للتسجيل وتحديد وقت امتحان الاختبار الوطني للقبول في الكليات الطبية. كما ويكونون قادرين على اختيار التاريخ والتوقيت. ويتوافر حاليّاً أكثر من 37 مركز اختبار في المدن الكبرى في جنوب أفريقيا، ونيجيريا، وبوتسوانا، وإثيوبيا، وناميبيا، وزيمبابواي.
لمحة عن مجلس القبول في إدارة الدراسات العليا ('جي إم إيه سي')
يُعدّ مجلس القبول في إدارة الدراسات العليا ('جي إم إيه سي') رابطة من الكليّات الرائدة للدراسات العليا في مجال إدارة الأعمال حول العالم. تأسّس المجلس في عام 1953، وإنّنا ملتزمون بخلق حلول تسمح لكليات إدارة الأعمال والمرشحين بإيجاد وتقييم والاتّصال بعضهم مع بعض. ونعمل لصالح الكليات ومجتمع تعليم الدراسات العليا في مجال إدارة الأعمال، كما لتوجيه المرشحين في مسيرتهم للتعليم العالي من أجل ضمان اكتشاف كافة المواهب.
ويقدّم مجلس القبول في إدارة الدراسات العليا الأبحاث وفرص التطوير المهني والتقييمات عالميّة المستوى للقطاع، وهي مصممة لتطوير فن وعلم قبول التسجيل. ويُشكّل إختبار القبول للدراسات العليا في مجال الإدارة ('جي إم إيه تي') الذي يمتلكه ويديره مجلس القبول في إدارة الدراسات العليا تقييم الدراسات العليا لإدارة الأعمال الأكثر انتشاراً والمعترف به من قبل أكثر من 7 آلاف برنامج حول العالم. وتتألّف تقييمات 'جي إم إيه تي' الأخرى من الاختبار الوطني للقبول في الكليات الطبية ('إن إم إيه تي') من 'جي إم إيه سي'، للدخول في برامج الدراسات العليا لإدارة الأعمال في الهند و10 بلدان أخرى، والتقييم التنفيذي ('إي إيه') المصمّم خصيصاً للبرامج التنفيذية حول العالم.
وتسجل بوابتنا لمصادر ومعلومات تعليم الدراسات العليا في مجال إدارة الأعمال www.mba.com نحو 7 ملايين زيارة في العام وتضمّ أداة مطابقة البحث عن الكليات وخدمة البحث 'جي إم إيه إس إس'، التي تطابق المرشحين مع كليات إدارة الأعمال.
ويُعد مجلس القبول في إدارة الدراسات العليا مؤسسة عالميّة لها مكاتب في هونج كونج بالصين؛ وجوروجرام في الهند؛ وسنغافورة؛ ولندن في المملكة المتحدة؛ وفي الولايات المتحدة الأمريكيّة. لمعرفة المزيد حول عملنا، يرجى زيارة الرابط الإلكتروني التالي: www.gmac.com.
إنّ نص اللغة الأصلية لهذا البيان هو النسخة الرسمية المعتمدة. أما الترجمة فقد قدمت للمساعدة فقط، ويجب الرجوع لنص اللغة الأصلية الذي يمثل النسخة الوحيدة ذات التأثير القانوني.
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All three Oil Marketing Companies (OMC) have announced their financial performance for March 2019 (Q4FY19) quarter. On Wednesday, the share price of Hindustan Petroleum Corp Ltd (HPCL) was trading at Rs 290.10 per piece up by 1.75%. Similarly, Indian Oil (IOCL) also saw optimistic sentiments from investors, as it was performing at Rs 155.50 per piece up by 1.40%. Interestingly, it was Bharat Petroleum Corp Ltd (BPCL) that saw most love from buyers as the stock surged by nearly 3% and was trading at Rs 384.45 per piece. Considering all OMCs are in green, the real question is, where are their stocks headed? Post Q4FY19, experts have given their investment call on HPCL, BPCL and IOCL. Here’s what you must do with your favorite OMC stocks.
Petroleo Brasileiro said on Tuesday it is interested in exercising its preferential right to tender in two areas in an auction of excess oil from the so-called “transfer of rights” (TOR) area, according to a company filing.
The Brazilian state-run company said it was interested in the Buzios and Itapu areas, based on a 30% stake with a chance to increase the holding on the day of the auction, which is expected in October. The auction could result in a signing bonus of nearly 21 billion reais ($5.20 billion), it said.
Petrobras, as the company is known, said that it could participate in auctions in two other areas, but on the same terms available to other potential bidders.
The news of Petrobras’ desire to enter the auction brings clarity to a long-awaited auction that is likely to lure some of the world’s top energy firms and which the government says could generate some 100 billion reais ($26 billion).
Petrobras has settled a long-running dispute about the TOR area, a roughly 2,800-square-km (1,080-square-mile) zone off the coast of southeastern Brazil where billions of barrels of oil are trapped beneath a layer of salt under the ocean floor.
Under the terms of the settlement, Brazil’s government will pay Petrobras $9.058 billion, paving the way for the auction, which grants access to prized assets in an oil-producing zone known as the pre-salt. The area has emerged as one of the world’s most promising conventional oil plays.
Petrobras and the government are still discussing how the auction winners will potentially partner with the state oil company, which is already producing at Buzios and has the right of first refusal to remain operator at the four fields.
Regardless of the final arrangement, winners of the auction will be required to compensate Petrobras for the infrastructure and exploratory work in which the company has already invested.
Among the companies with exploration and production assets adjacent or relatively close to the TOR area, offering potential cost savings, are Total SA, Royal Dutch Shell PLC, and China’s CNOOC Ltd and CNPC.
Hopes for a speedy resumption of oil exports from Russia to Poland and Germany along the Druzhba pipeline route are fading after plans to remove dirty oil from the pipeline had a major setback last week, three trading sources said.
Russia halted oil flows along the pipeline to Eastern Europe and Germany in April because of contaminated crude, leaving refiners in Europe scrambling to find supplies.
Under the restart plan, Total was due to take the lion’s share of the dirty oil into its Leuna refinery in Germany to dilute and process it there, sources said.
The plan, not previously reported, would allow the pipeline to restart clean oil shipments after its biggest ever outage, now in its fourth week.
But last week the Leuna refinery had a major outage and had to stop many units after an equipment failure which sources said was possibly related to refining the dirty oil.
The outage, which sources said could last for at least another week, has derailed the dirty oil evacuation plan. Some 8-9 million barrels of contaminated oil - worth $560-$630 million in normal circumstances - are still sitting in the pipeline.
“The plan has collapsed. Someone needs to come up with plan “B”,” said an industry source who is involved in discussions about dirty oil evacuation. “At the moment, there is no plan B. It is a deadlock”.
Total declined to comment. Russia’s pipeline monopoly Transneft and top Russian oil suppliers along Druzhba, Rosneft and Surgut, did not respond to a request for comment.
The Druzhba pipeline, built in Soviet times, can pump 1 million barrels per day or 1 percent of global output.
The contaminated oil crisis has become the biggest ever supply outage for Russia, the world’s No.2 oil exporter. The country has had only one other significant disruption when Moscow suspended shipments in 2007 for three days over a pricing dispute with Belarus.
DEADLOCK
The current crisis has escalated since Belarus told oil refiners and pipeline operators in Europe nearly four weeks ago that the crude heading down the 5,500 km (3,400 mile) Druzhba was heavily contaminated with organic chloride, which is used to clean oil wells and accelerate the flow of crude.
Flows via Druzhba were halted, sending crude to a six-month high above $75 a barrel and tarnishing Russia’s reputation as an exporter at a time of rising competition with the United States and Middle East.
Organic chloride should be removed before oil enters the supply chain as it can damage refining equipment. The dirty oil needs to be removed from the pipeline and stored so it can be diluted with clean oil.
Besides Leuna, Druzhba’s northern spur supplies Germany’s refinery Schwedt, which is co-owned by Rosneft, ENI and Shell. It also ships oil to PKN Orlen and Grupa Lotos refineries in Poland.
“Schwedt will take a much more cautious approach in taking dirty oil after the Leuna outage,” a second trading source said. A third trading source said Schwedt was not taking dirty oil.
Rosneft, ENI and Shell declined to comment. PKN Orlen and Grupa Lotos also declined to comment on options for evacuating the dirty oil.
PKN’s chief executive said on Monday Poland would not be able to get clean oil from Russia until refineries agree how to divide tainted crude still in the system.
Russia has repeatedly promised to restart clean oil flows towards Belarus, Poland and Germany “within days”.
But it has yet to happen and even when it happens it will not mean the crisis is over, traders said.
“All this news about clean oil flows resumption is meaningless. Dirty oil is still blocking the pipelines,” said the first industry source.
Russian officials will meet with European pipeline firms and oil buyers later this week to discuss the impasse.
A fourth industry source familiar with discussions said one of the suggestions for dirty oil evacuation was to reverse the pipeline and pump oil from Poland, Germany and Belarus back to Russia for storage and dilution.
But the oil has already changed hands multiple times and the Russian government has collected taxes and customs duties after the oil crossed the border.
All those payments would need to be reversed in a unprecedented move for the Russian government and the oil industry, the fourth source said.
U.S. crude oil refinery inputs averaged 16.6 million barrels per day during the week ending May 17, 2019, which was 98,000 barrels per day less than the previous week’s average. Refineries operated at 89.9% of their operable capacity last week. Gasoline production decreased last week, averaging 9.9 million barrels per day. Distillate fuel production decreased last week, averaging 5.2 million barrels per day.
U.S. crude oil imports averaged 6.9 million barrels per day last week, down by 669,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.2 million barrels per day, 9.4% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1,350,000 barrels per day, and distillate fuel imports averaged 102,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.7 million barrels from the previous week. At 476.8 million barrels, U.S. crude oil inventories are about 4% above the five year average for this time of year. Total motor gasoline inventories increased by 3.7 million barrels last week and are at the five year average for this time of year. Finished gasoline and blending components inventories both increased last week. Distillate fuel inventories increased by 0.8 million barrels last week and are about 4% below the five year average for this time of year. Propane/propylene inventories increased by 3.1 million barrels last week and are about 22% above the five year average for this time of year. Total commercial petroleum inventories increased last week by 16.8 million barrels last week.
Total products supplied over the last four-week period averaged 19.9 million barrels per day, down by 2.7% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.4 million barrels per day, down by 1.1% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per day over the past four weeks, down by 4.0% from the same period last year. Jet fuel product supplied was up 2.5% compared with the same four-week period last year
Domestic production continues fairground ride up 100,000 bbls day
Exports 2.922 mln bbls day down 425,000 bbls day
Cushing up 1.3 mln bbls
As confusion among oil traders persists regarding where oil prices are going to go from here, the Energy Information Administration scored one for the bears by reporting a crude oil inventory build of 4.7 million barrels in the week to May 17.
This compares with a build of 5.4 million barrels for the week before that and a 4-million-barrel draw a week before that: a mixed picture that does not help particularly in any attempt to gauge the immediate future of oil prices.
The EIA also reported a 3.7-million-barrel rise in gasoline inventories for the eek to May 17 and a 800,000-barrel rise in distillate fuel inventories. These compared with a 1.1-million-barrel draw in gasoline inventories a week earlier and a 100,000-barrel increase in distillate fuel inventories a week earlier.
In terms of production, refineries churned out 9.9 million bpd of gasoline last week, unchanged on a week earlier. Distillate fuel production averaged 5.2 million bpd, which compared with 5.3 million bpd in the previous week.
Average processing rates in the last week before Memorial Day and the official start of driving season stood at 16.6 million barrels daily, which compared with 16.7 million bpd a week earlier.
In the coming weeks and months demand for gasoline should rise although last year’s driving season served an unpleasant surprise to those expecting a major pick-up in demand. This year we might see a similar trend as [prices at the pump remain relatively high on the OPEC+ cuts and the rising tension in the Middle East. Related: OPEC+ Top Priority: Don’t Crash Oil Prices
Yet not all analysts believe the status quo is a stable one. While some analysts and investment banks are once again talking about Brent crude hitting US$80, US$90, or even US$100 a barrel, compared to the current level of around US$72 per barrel, others, namely JP Morgan, beg to differ.
Scott Darling, head of Asia Pacific oil and gas research at JP Morgan, told CNBC earlier this week the geopolitical risk premium to benchmarks was a short-term affair and the stable rise in U.S. oil production would eventually undermine its effect on prices.
At the time of writing, Brent was trading at US$71.87 a barrel, with West Texas Intermediate at US$62.59 a barrel, both down from opening.
By Irina Slav for Oilprice.com
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Oil prices fell on Tuesday after Saudi Arabia reiterated it would aim to keep the market balanced and try to reduce tensions in the Middle East, while industry data showed a surprise increase in U.S. crude inventories. Brent crude futures were down 37 cents, or 0.5%, at $71.81 at barrel by 0037, having risen 21 cents on Tuesday.
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Asia’s oil refiners are considering reducing output after margins slumped to their lowest for the season since 2003, according to industry sources and Refinitiv data.
Companies that planned to trim output include SK Energy, a unit of SK Innovation, the Singapore Refinery Company (SRC), owned by PetroChina and Chevron Corp and at least one refiner in Thailand, five people familiar with the matter said.
In China, independent refiners known as ‘teapots’, which account for about a fifth of the country’s crude imports, operated at below 50% of capacity on average in April through May, versus 64% in the first quarter, said Zang Wengang, an analyst with Sublime Information Co.
A spokeswoman for SK Innovation spokeswoman declined to comment, while SRC did not respond to a request for comment.
The people familiar with the matter declined to be identified because they are not authorized to speak to media.
Rising crude purchasing costs have hit refiners’ bottom line. “We plan to lower (the operating rate) a bit...soon,” one of the sources said.
Spot crude cargoes have sold at multi-year high premiums as U.S. sanctions on Iran and Venezuela reduced supplies for Asia while a crisis in Russia over contaminated crude boosted Brent prices.
Meanwhile excess supplies of light products, gasoline and petrochemical feedstock naphtha have squeezed margins further.
Margins at a refinery complex in Singapore are at their lowest for this time of the year since 2003, even narrower than lows seen in 2009’s global financial crisis, Refinitiv data showed.
The profits are more than $3 a barrel lower than the average for the past decade since 2009.
Next month, Middle East producers led by top exporter Saudi Arabia are set to raise official selling prices (OSP) for a fourth straight month to track stronger spot markets.
Crude prices “are too high while product cracks (profit margins) are getting worse,” another source from a north Asian refiner said, adding that refiners are cutting cost by buying cheaper straight-run fuel oil to process at secondary refining units.
“Aromatics margins are getting worse so refiners will try to optimize as much as possible,” the person said, referring to profits for paraxylene, a petrochemical used to make textile and plastic bottles.
Asia’s naphtha crack on Wednesday hit a six-month low at a discount of about $9 a barrel to Brent crude, lower than that for fuel oil.
Asia’s naphtha supply from the west had remained high despite lower demand caused by ongoing cracker maintenance, outages at plants in Taiwan and Japan and an extended shutdown at a naphtha cracker in South Korea.
OUTLOOK TO IMPROVE?
Still, margins may begin to improve. About 24% of Japan’s refining capacity will be shut for maintenance by early June while state-run Indian refiners have already made plans to shut down units for upgrade, and Reliance Industries plans to halve crude runs at a 660,000 bpd refinery that serves domestic markets.
Domestic margins in Japan have remained strong with gasoline profits at $25 a barrel, said a Tokyo-based analyst who looks at Japanese refiners.
There could be better news for refiners in China, too.
“After suffering really bad margins for the first five months, China’s independents will likely see margins recover in the third quarter on higher seasonal demand and as supplies tighten from much larger export quotas,” said Sublime’s Zang.
Analysts also expect a mandate to switch to low-sulphur fuel for ships from 2020, under new international rules introduced to protect the environment, to tighten diesel supplies, which could boost refining margins.
“Asian complex refiners are best positioned given their high sour crude ratio and mid-distillates yield,” Citi analyst Oscar Yee said in a note. Gross refining margins could rise by $2 to $4 a barrel year-on-year in 2020, he said.
Refiners that could benefit includes Reliance, SK Innovation and S-Oil Corp, China’s Sinopec and Hengli Petrochemical and Thai Oil PCL, Yee said.
As tensions in the Middle East continue to escalate with Iran threatening to choke off shipments through oil’s most critical chokepoint, the Strait of Hormuz, two countries are looking for a workaround to avoid the Strait in the event of a closure, according to an Iraqi lawmaker said on Wednesday, cited by Kurdistan24.
Regardless of how unlikely it may be that Iran make good on its threat to close the Strait of Hormuz should the United States effectively bring Iran’s oil exports to zero, the countries that rely on the shipments through the Strait are working in the background, pre-emptively finding a way around should the worst-case scenario come to fruition.
Qatar and Kuwait have both approached Iraq, proposing to use Iraq “as an alternative path for oil transport” should the need arise, through the Iraqi pipeline.
On Tuesday, Iraqi Prime Minster Adil Abdul-Mahdi suggested that it would be possible to move Iraqi oil through the Kurdistan region to the Port of Ceyhan in Turkey.
Threatening to close off the Strait of Hormuz is a particularly mouthwatering prospect that sees about 18.5 million barrels per day of oil through its narrow passage, according to the EIA, about 80% of which heads to Asian markets.
"According to international law, the Strait of Hormuz is a marine passageway and if we are barred from using it, we will shut it down. In case of any threat, we will have not even an iota of doubt to protect and defend the Iranian waters. We will defend our prestige and embark on reciprocal acts when it comes to defending Iran's right," Iranian Fars news agency quoted Navy Rear Admiral Alireza Tangsiri, Commander of the Islamic Revolution Guards Corps (IRGC) as saying last month.
Proposed Alaskan project set to enter FEED in the third quarter
Oil Search has received a key approval for its proposed Pikka development project on Alaska’s North Slope in the US. Oil Search confirmed Thursday it had received the US Army Corps of Engineers approval
https://www.upstreamonline.com/live/1789983/oil-search-makes-progress-on-pikka
Tallgrass Energy LP said on Thursday it has shut down the south end of its Pony Express pipeline system due to flooding, and provided notice of a temporary embargo of deliveries.
Extensive flooding on the Cimarron River in Oklahoma required the temporary embargo on all movements into destinations located near Cushing, Oklahoma, the company said.
The Pony Express pipeline has a capacity of 320,000 barrels per day. The pipeline starts in Guernsey, Wyoming, and flows southeast to Cushing, according to the company’s website.
The shut segment runs from Sterling, Colorado through to Cushing, Oklahoma, a Tallgrass Energy spokeswoman said.
“We will restart operations as soon as the weather permits,” she added.
A relentless barrage of violent weather has hit the central United States, including tornadoes in southwestern Missouri that devastated the state capital and heavy rains that prompted flooding in Oklahoma. The weather has resulted in three deaths, according to local media.
“It looks to stay quite wet over the next week across the central portion of the country,” said meteorologist Mark Chenard of the National Weather Service’s Weather Prediction Center in College Park, Maryland.
The world’s newest offshore hotspot, Guyana, is in the early stages of a probe into how oil exploration rights were awarded for oil blocks that are currently controlled by ExxonMobil and Tullow Oil, Clive Thomas, director of Guyana’s State Assets Recovery Agency, told Bloombergin an interview published this week.
Neither Exxon nor Tullow Oil are targets of the investigation. The two companies are not accused of any misconduct either. They are operators of the oil blocks which will be included in the scope of the investigation as the current administration in Guyana is looking to assess the procedures under which the oil blocks had been awarded.
The Stabroek, Kaieteur, Canje, and Orinduik blocks will be part of the investigation. Exxon is operator of Stabroek, Kaieteur, Canje, while Tullow Oil operates the Orinduik block.
“We’re building up a case. This is an area of investigation into how the blocks were allocated and the decisions that were made,” Thomas told Bloomberg.
The little known South American country bordering Venezuela has become one of the world’s top hotspots for oil offshore operators in just a few years. Some critics of the way Guyana handled the oil block leases, such as the president’s former energy adviser Jan Mangal, argue that Guyana sold off its oil riches too cheaply. A curious fact was also the timing of a lease for the Kaieteur block to Exxon in the final days of the previous administration in 2015—the awarding of the block took place just nine days before Exxon announced its first (of now more than a dozen) discoveries offshore Guyana.
Exxon was the world’s top oil and gas explorer in 2018, thanks to its significant investment in Guyana, according to Rystad Energy’s annual exploration review.
Guyana is one of Exxon’s key growth areas for the coming years, alongside the Permian.
Earlier this month, Exxon gave the green light to the development of Liza Phase 2 offshore Guyana after it received government and regulatory approvals. Phase 2 is expected to begin producing up to 220,000 bpd in mid-2022, while Phase 1 is on schedule for first oil by first quarter of 2020, with up to 120,000 bpd of production.
Australia's booming LNG sector is set to benefit from the increasing trade tensions between the United States and China, with potential delays to US projects forcing Beijing to look at Australia to fill the gaps in its rising gas demand.
Tensions between the two countries deepened this week after US President Donald Trump threatened to slap China with an additional $US300 billion ($435 billion) in tariffs. China retaliated by raising its own import tariffs, including lifting imposts on US LNG from 10 per cent to 25 per cent, starting on June 1.
US President Donald Trump's increasing tariffs on Chinese goods have seen the Chinese retaliate by slapping higher tariffs on US LNG. Credit:UPI
US LNG exports to China have already fallen 80 per cent, down to just four cargoes, this financial year compared with this time last year. China has no tariffs on US oil.
In 2018, China imported 23 million tonnes of LNG from Australia, about 42 per cent of the country’s total LNG exports. China was expected to import about 3 million tonnes of LNG from the US this year, before the tariffs.
May 19, 2019-
Just a month after works resumed following a six-month hiatus, the Koshi corridor transmission line project has again faced a setback as the project has been barred from extracting construction materials from local rivers for the construction of substations.
The national pride project, being built to evacuate around 550 MW of energy in the initial phase from under construction hydel plants in the eastern region, is facing a shortage of granular materials after local forest authorities forbade extraction of sand and gravel from Sabha River.
“The project contractor has been asked to haul sand and gravel from Itahari to build substations at Basantapur, Baneshwar and Tumlingtar,” said project chief Rajan Dhakal. “We are reeling under severe crunch of construction materials and hauling sand and gravel from Itahari to Tumlingtar will increase cost overruns and is also logistically challenging.”
According to Dhakal, government officials have asked the project to shift sand and gravel crushers from Sabha River banks elsewhere but the crusher contractor is reluctant to do so. “With the onset of monsoon, forest officials will also enforce an extraction prohibition period starting from May to September and it will push the project completion deadline by at least 10 months,” he said.
The Nepal Electricity Authority, the project executing agency, is likely to face penalties, if the transmission line does not go live within the stipulated deadline, as it has already signed power purchase agreements for 516 MW of electricity with 28 independent hydropower projects in the region.
In absence of a transmission system connecting Bhojpur, Shankhuwasabha, Tehrathum and Taplejung, the power produced by the private plants including 51 MW Mewa Khola, 15 MW Maya Khola, which is nearing completion, will go to waste.
“Just a month ago we resolved a row over route of power lines with Dharan metropolis and now we are being denied from extracting construction materials,” said managing director Kulman Ghising of Nepal Electricity Authority. “If the project is delayed, both private producers and NEA will have to bear loses running into the millions.” As per the purchase terms, the state-owned power utility is obliged to cover 45 percent of the operational losses of the private plants, if it fails to build the transmission system within one and a half years, said Ghising.
According to electricity authority officials, both private hydropower projects and government owned projects in the region are experiencing shortage of construction materials following the ban.
“Despite multiple rounds of talks facilitated by the district coordination committee, there has been no headway and forest officials who are guided by vested interests are adamant on not letting us extract materials from Sabha River citing environmental issues,” a project official said after requesting not to be named. “We cannot extract sand and gravel from Arun River as the water level is high and it is too costly to haul materials from Itahari.” The government had approved the preliminary environmental impact assessment of the project and issued a permission letter allowing the electricity authority to develop the 220 kV transmission lines and supporting infrastructures and transmit electricity from Koshi River basin in line with provisions of the Electricity Act 1992 in January, 2015.
Hailed as a life-line project in the eastern region, the project funded through a line of credit worth $250 million from Export-Import Bank of India, is being built to evacuate power from hydel plants located at Arun River, Tamor River and their tributaries that carry massive generation potential over 2000 MW.
Indian contractor Larsen and Turbo has been building three substations at Basantapur, Baneshwar and Tumlingtar under the second component of the corridor project at a cost of $25.29 million. The electricity authority began works on the substation in June 2016 and has set a completion deadline of February 2020.
Earlier, the construction of towers along the 105 km Inaruwa-Tumlingtar transmission route was obstructed by Dharan Metropolis citing that the alignment of towers would hurt tourism and paragliding prospects in the area.
Works on the first component worth $37.5 million, the 220 kV double circuit line from Inaruwa to Tumlingtar, halted for six months and had resumed after Chief Minister Sherdhan Rai of Province 1 facilitated an agreement between local representatives, Dharan metropolis and the electricity authority in April.
Published: 19-05-2019 08:25
The U.S. Federal Energy Regulatory Commision (FERC) approved privately-held Freeport LNG’s plan to build and operate a fourth liquefaction train at its Freeport liquefied natural gas export terminal in Texas:
* Freeport said it expects the U.S. Department of Energy to authorize Train 4 to sell LNG to non-Free Trade Agreement countries later this quarter.
* Earlier this week, KBR Inc said Freeport picked the engineering firm as the preferred bidder to build Train 4.
* Freeport has said it could make a final investment decision to build Train 4 during the second quarter with the plant expected to enter service in 2023.
* Freeport said Train 1 is on track to enter service in the third quarter followed by Train 2 in the first quarter of 2020 and Train 3 in the second quarter of 2020.
* When Freeport started building the first three trains at the $13 billion facility it projected the units would enter service between the fourth quarter of 2018 and the fourth quarter of 2019.
* McDermott International Inc is the lead contractor for the first three units at Freeport.
* Freeport has said the first cargoes from the plant would likely start in late July.
* Each train at Freeport will have the capacity to produce about 5 million tonnes per annum (MTPA) of LNG or around 0.7 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
* Freeport has said it has 20-year contracts to sell LNG to Japanese gas companies Osaka Gas Co Ltd and JERA - an alliance between Japanese power companies Tokyo Electric Power Co Holdings Inc and Chubu Electric Power Co Inc - from Train 1, British oil major BP Plc from Train 2 and Japanese engineering firm Toshiba Corp and South Korean energy company SK E&S from Train 3.
* Freeport also has a three-year deal to sell 0.5 MTPA of LNG to multinational commodity trading firm Trafigura Group Pte Ltd starting in July 2020.
* In addition, Freeport has said it is working on a 20-year deal to sell 2.2 MTPA of LNG to a unit of Japanese trading firm Sumitomo Corp from Train 4.
With so much cheap liquefied natural gas around, traders are again looking at tankers to store the fuel in the hope of better prices.
A long-established practice in oil trading, the complexity and cost of keeping natural gas in liquid form on ships for extended periods meant it wasn’t widely used until last fall, in anticipation of a surge in Chinese demand and prices. That bet backfired when a mild winter damped requirements for the fuel, forcing traders to discharge LNG and release the vessels, which caused a crash in spot charter rates.
While it’s a gamble as weather-driven demand is unpredictable, price signals indicate the option to store LNG in vessels later this year is again becoming attractive, not only in Asia, but also in Europe. The price premium for later contracts, or contango, is building up for both spot Asian LNG prices and the UK benchmark, leaving traders weighing how to profit should they choose to store gas at sea.
“We could see a lot of floating LNG storage from September and this could also tighten shipping rates before winter,” Nick Boyes, a senior gas and LNG analyst at Swiss utility and trader Axpo Group, said by email.
Given the price gap, and with an estimated cost of storing LNG of $0.60-$.075/MM Btu a month, “current freight rates allow for floating storage opportunities in September, October and November this year in both northeast Asia and Atlantic,” Boyes said.
JKM futures for December are about $2.30/MM Btu higher than September contracts, or a premium of $7.6 million for a 3.3 trillion Btu cargo. How much profit can actually be made is strongly dependent on the cost of renting a tanker and of keeping the fuel in liquid form at minus 162°C (minus 260°F).
“I think it’s more a question of who’s going to jump the gun first when it comes to floating storage,” said Oystein Kalleklev, chief executive officer of Hamilton, Bermuda-based Flex LNG Ltd., a ship-owner and operator. “I reckon the first deals will probably be balanced contango trades benefiting both traders and shipowners as traders probably need to take some risk to get the math to work.”
High storage levels in Europe means tankers are one of the few ways to benefit from the current contango. That would also benefit companies with extensive shipping capacity and shipowners that have battled with a collapse in spot charter rates since the start of the year.
In 2018, Cheniere Energy, which mainly trades the U.S. LNG it produces as well as some volumes purchased from the market, chartered out some ships and benefited from record-high shipping rates for vessels on the spot market when some parties were using the ships as floating storage.
The rates have now stabilized and are showing signs of recovery amid early inquiries for charters through the winter, according to GasLog Ltd., another ship owner.
Still, the industry has probably learnt the lessons from both 2017, when a sudden surge in Chinese LNG demand caught the market by surprise, and 2018, when early stockpiling, floating cargoes and disappointing winter demand resulted in excess LNG and lower prices, GasLog CFO Alastair Maxwell said.
LNG has to be chilled, so it remains in the more compact liquid form that eases transportation across thousands of miles. While some of the cargo always gets used to keep temperatures low, known as boil off, newer ships help limit that problem.
“Contango is for shipowners the best dance in town as it absorbs shipping capacity,” Flex LNG’s Kalleklev said. “The key challenge with LNG storage is the cargo waste resulting from LNG being a live cargo with associated boil off. Hence, newer vessels with low levels of boil off and/or reliquefaction plants are the most suitable candidates for such trade."
The U.S. Securities and Exchange Commission is investigating the Houston oil and gas company Alta Mesa Resources for potential fraud amid admitted failures in its financial reporting.
A 1-year-old company already struggling to survive, Alta Mesa originated from a $1 billion black-check firm led by the former chief of Anadarko Petroleum. Alta Mesa is now valued at just more than $30 million on Wall Street and its stock is trading for 18 cents a share.
The company is barely staying afloat for now, recently laying off roughly one-third of its 200 employees and writing down the value of its assets by $3.1 billion because of its undisclosed financial flaws. The company has declined to elaborate on the nature of its internal financial errors.
Alta Mesa is considering a potential bankruptcy filing in the months ahead as it deals with defaults on its loan agreements and de-listing warnings from the Nasdaq stock exchange, Alta Mesa acknowledged Friday in its belated annual report filing with the SEC.
Although Alta Mesa has yet to belatedly file its first-quarter earnings, the company is estimating a net loss of $13 million for the first three months of the year.
Alta Mesa holds more than $1 billion in debt and could soon face default on more of its loans, the company said. Discussions with its lenders are ongoing. The company already is in default on some of its loan agreements for failing to report its first-quarter earnings by mid-May.
Alta Mesa said it is cooperating with the SEC investigation and could face civil penalties. The company said it is working to fix its internal controls and financial reporting, but there's no set timeline for successfully implementing a new system.
The SEC does not comment on ongoing investigations.
Chairman Jim Hackett, who previously headed Anadarko, continues to serve as the interim chief executive since the company's previous CEO, chief operating officer and chief financial officer all abruptly resigned in late 2018 and earlier this year.
Hackett led the formation of the new Alta Mesa, although he initially took a backseat role as chairman. Alta Mesa was put together by Hackett's acquisition entity, known as a blank-check firm, which was backed by Riverstone Holdings, an energy-focused private equity firm.
To create the new Alta Mesa, Hackett's Silver Run Acquisition Corp. II combined with two privately held companies, Alta Mesa Holdings and Kingfisher Midstream, both of which focused on Oklahoma oil and gas acreage and pipelines. The company began trading in early 2018 under the "AMR" stock ticker, touting an aggregate Wall Street value of $3.8 billion.
Alta Mesa also is facing a series of lawsuits. Some shareholders are suing claiming they were defrauded and lied to about the value of the company and its assets when the company was formed. And some landowners are suing for alleged breaches of their minerals leases and for failing to fix alleged property contamination from its operations.
Kazakh sovereign wealth fund Samruk-Kazyna aims to raise $3 billion to $5 billion from its sale of up to 25 percent in state-owned KazMunayGaz < KMGZ.KZ> next year, the fund’s managing director said on Friday.
The government has not till now given a valuation for the initial public offering in the state energy firm, the biggest asset being put up for sale in its privatisation programme.
The IPO plans had been delayed until beyond 2019, partly due to tepid investor interest in IPOs.
Samruk-Kazyna Managing Director Almasadam Satkaliyev told reporters the sovereign fund would list smaller assets such as and Air Astana before floating the energy company.
The fund planned to sell about 10 percent of Kazakhtelecom , reducing its stake to about 41 percent, on the Astana International Exchange in July or November, he said. The listed telecoms firm has a market capitalisation of about $740 million.
The timing and other details of an initial public offering in Air Astana have yet to be decided, Satkaliyev said. The IPO coordinators are J.P.Morgan and UBS.
Samruk-Kazyna might sell an additional 10 percent stake in Kazatomptom, the world’s biggest uranium miner which was floated in London and Astana with the sale in November of a 15 percent stake, Satkaliyev said, adding that the timing for selling more shares would be determined by market conditions.
Exxon Mobil Corporation’s (XOM - Free Report)Gulf of Mexico (GoM) oilfield divestment package has attracted Spanish energy company, Repsol SA (REPYY - Free Report)and United Kingdom-based Ineos Group Holdings’ attention, per Bloomberg. The value of the assets in the package is estimated at $1.5 billion.
If Repsol acquires the assets, it would increase its footprint in the area whereas for Ineos it would mark its foray into the prolific region. Moreover, the buyout can help Ineos in generating substantial value from operations as it already has petrochemical plants in the United States’ Southern part. The divestment deal is expected to be signed within a month at the earliest.
Notably, ExxonMobil expressed its interest to divest some of the operated and non-operated assets in the region last October. The company always looks for better opportunities. The GoM divestments will likely enable it to focus on its prolific upstream assets globally, given a number of major projects coming online over the next few years. Markedly, with three fresh offshore oil discoveries in Guyana, ExxonMobil recently completed 13 discoveries in the Stabroek Block.
Moreover, the company recently made the world's third biggest natural gas discovery in the last two years in the Glaucus-1 well, located off the coast of Cyprus. The new discovery may comprise 5-8 trillion cubic feet of natural gas resource. Also, in a bid to address transport constraints and pump out five times more oil from the Permian through 2025, ExxonMobil is investing billions in the basin’s midstream infrastructure.
Not everyone in the shale patch is profiting from the higher oil prices this year, the continuously rising oil production in the Permian, and the record U.S. crude output.
While larger players, including supermajors Exxon and Chevron, are expanding their Permian presence and aim to grow production volumes significantly over the next few years, small, third-tier exploration and production companies across the U.S. are struggling even at WTI Crude prices of above $60 a barrel.
Some small players who have been relying on borrowings to finance drilling are now finding themselves in a position to look for options to restructure debt, including by seeking Chapter 11 bankruptcy protection.
Despite the oil price rally in Q1 this year, some smaller firms are struggling to stay afloat. And analysts think that this year could be more painful for more E&P players in the shale patch than last year.
U.S. shale production growth is expected to slow this year, according to Schlumberger. The world’s biggest oilfield services provider cited “higher cost of capital, lower borrowing capacity, and investors looking for increased returns” as the primary reasons for an expected 10-percent drop in E&P investments in North America’s onshore this year.
The firms with lower borrowing capacity that have been relying on taking more debt in order to grow production are the first casualties of this business model. Some oilfield services providers are also struggling, including Weatherford International, which was the one of the top oilfield services provider until recently.
Earlier this month, Weatherford said that it had reached a deal with senior note holders about a financial restructuring aimed at significantly reducing long-term debt. The company expects the restructuring agreement to be implemented under a ‘pre-packaged’ Chapter 11 process and expects to file U.S. chapter 11 proceedings.Related: The Single Most Bullish Indicator For Oil
Last week, the NYSE suspended trading in Weatherford’s ordinary shares and said it intends to begin proceedings to delist the shares because they are longer suitable for listing due to “abnormally low” price levels. Weatherford plans to appeal that decision.
The financial struggles of what was one of the top drilling and well-completion services provider come as U.S. shale production is booming and the Permian continues to set new production records.
The shale production boom, however, is not a boon to all players in the U.S. oil patch. Under debt burdens, some smaller companies have opted for Chapter 11 proceedings to clean up their balance sheets.
Austin-based Jones Energy, for example, filed and emerged from Chapter 11 earlier this year to clean up the balance sheet, and to enter a new borrowing base agreement.
Yet, going into bankruptcy proceedings in order to restructure debt has not been the favorite choice of the companies’ boards.
“It takes a long time for the boards of these companies to really realize this may be the only way they can clean up the balance sheet,” Patrick Hughes, a partner at law firm Haynes and Boone LLP, told Bloomberg in an interview last week.
According to Haynes and Boone, the number of North American oil and gas producer bankruptcies has dropped significantly over the past three years, from more than 100 in 2015-2016 to 24 bankruptcy filings in 2017, 29 in 2018 and six as of May 1, 2019.
“Although still below the higher prices oil producers received last fall, the increase relieves a lot of pressure on many oil companies that avoided bankruptcy but remain weighed down by the hangover of high leverage taken on before the 2015 price crash. Even with the relief in oil prices, some companies remain financially stressed and may not be able to avoid restructuring their debt through bankruptcy. And some companies may be heading for Chapter 11 for a second time,” Haynes and Boone said in its Oil Patch Bankruptcy Monitor published last week.
In the Oilfield Services Bankruptcy Tracker, Haynes and Boone said that between 2018 and Q1 2019, the number of bankruptcy filings in North America’s oilfield services industry dropped to 15 filings with aggregate debt of US$3.82 billion, from 40 filings and aggregate debt of US$35 billion in 2017. This drop in bankruptcy filings is attributed to higher oil prices.
According to Bloomberg estimates, a bankruptcy at Weatherford alone would mean US$8 billion of debt added to this year’s aggregate debts from bankruptcies.
“Capital markets – both equity and debt – have fallen significantly out of favour as sources of capital,” Haynes and Boone said in March in its Borrowing Base Redeterminations Survey for the spring of 2019.
Experts and analysts expect that more third-tier indebted companies across the U.S. shale patch will come under financial distress this year despite the $60 WTI price—a trend that’s not immediately visible when one looks at the record American oil production.
The U.S. Geological Survey has confirmed that four low-magnitude earthquakes have taken place over the past two weeks in the Eagle Ford Shale of South Texas.
The U.S. Geological Survey has confirmed that four low-magnitude earthquakes have taken place over the past two weeks in the Eagle Ford Shale of South Texas.
USGS officials confirmed a 2.5-magnitude earthquake about five miles east of the Gonzales County town of Smiley on Saturday evening.
No major damages or injuries were reported from the low-magnitude earthquake, which followed a 3.1-magnitude earthquake was recorded less than mile northwest of Smiley five days before.
Another 3.1-magnitude earthquake was recorded a couple miles south of Westhoff in neighboring DeWitt County on May 12.
One day earlier, USGS officials recorded a 3.0-magnitude earthquake a few miles east of the Karnes County town of Gillett.
Shaky Ground: Trio of earthquakes hit Eagle Ford town of Three Rivers
There have been seven earthquakes recorded in the Eagle Ford Shale of South Texas this year.
Environmentalists blame the tremors on saltwater disposal wells, which inject wastewater generated in the hydraulic fracturing process and other oil and natural gas activities deep underground.
Saltwater disposal wells are regulated by the Railroad Commission of Texas, the state agency that regulates the oil and natural gas industry.
Railroad Commission officials adopted stricter regulations for saltwater disposal wells in November 2014. Over the last four years, the agency received 367 disposal well applications in areas of historic seismicity.
Of those proposed projects, 163 permits were issued with special conditions that include reducing maximum daily injection volumes and pressures as well as being required to record volumes and pressures on a daily basis as opposed to monthly.
Fifty-four disposal applications were returned or withdrawn. Eleven applications were sent to hearing. Twenty-one permits were issued without special conditions and 118 applications are pending technical review.
United States Energy Secretary Rick Perry said on Tuesday that a sanctions bill putting onerous restrictions on companies involved in the Nord Stream 2 project would come in the “not too distant future”.
The Nord Stream 2 gas pipeline project has come under fire from the United States and several eastern European, Nordic and Baltic Sea countries which fear it will increase the European Union’s reliance on Russian gas.
“The opposition to Nord Stream 2 is still very much alive and well in the United States,” Perry told a briefing on a visit to Kiev for the inauguration of President Volodymyr Zelenskiy.
“The United States Senate is going to pass a bill, the House is going to approve it, and it’s going to go to the President and he’s going to sign it, that is going to put sanctions on Nord Stream 2.”
https://www.cnbc.com/2019/05/21/us-energy-secretary-sanctions-bill-on-nord-stream-2-coming-soon.html
Brazil’s state-run oil company Petrobras said on Tuesday its board of directors approved an addendum to a transfer-of-rights oil contract that will see it reimbursed to the tune of $9.06 billion, but the deal remains subject to governmental agreement.
Approval depends on the publication of a Ministry of Mines and Energy decree that does not violate the rights and conditions from the contract Petrobras has already negotiated, the company said in a statement.
Pioneer Natural Resources Co, one of the largest producers in the Permian Basin of West Texas and New Mexico, announced on Tuesday that it had cut about a quarter of its workforce to save costs and boost shareholder value.
Irving, Texas-based Pioneer laid off 230 employees this week at its headquarters and in its Permian Basin offices, and cut another 300 workers in April, the company said in statement.
It expects $100 million in cost reductions “in order to remain competitive with our peers,” Pioneer said in a statement.
“Decisions like these are never easy. In this case they were necessary to both align our cost structure with our business strategy and to create value for our shareholders over the long term,” the company said in a statement.
Earlier this month, Pioneer said it was selling its Eagle Ford Shale position in South Texas to Ensign Natural Resources, a portfolio company of Warburg Pincus.
The company is now a “pure play” Permian Basin producer.
Shale firms have pushed U.S. oil output to record levels. But years of heavy spending led to investor pressure to reduce spending and use the cash to provide payouts, rather than produce more oil.
Employees whose jobs were cut were to receive financial packages and job placement services, Pioneer said.
zoom Image courtesy of Enagás
Spain’s imports of liquefied natural gas (LNG) jumped 15.3 in April when compared to the corresponding month last year, according to the monthly data by the LNG terminal operator Enagás.
LNG imports reached some 15.8 terawatt hours (TWh) in April 2019 as compared to 13.7 TWh in April 2018.
Total natural gas imports, including piped supplies, dropped 8.2 percent to 29.9 TWh. Pipeline supplies from Algeria plunged 47.1 percent to 8.8 TWh, as compared to 16.6 TWh the previous year.
Top LNG supplier to Spain during the month of April 2019 was Nigeria with 3.8 TWh, followed by Trinidad and Tobago (3.6 TWh) and Algeria (3.2 TWh).
Spain imported 2.7 TWh of LNG from Qatar, followed by 1.1 TWh of LNG from Russia, with the United States and Norway each providing 0.9 TWh of LNG.
The Barcelona regasification plant received seven LNG shipments out of the total 23 cargoes imported into Spain during the month under review.
Huelva received six LNG cargoes while Bilbao took five shipments in April with Huelva facility receiving five cargoes. Bilbao facility received four cargoes while the Cartagena and Sagunto facilities each received a single cargo. No cargoes were delivered to the Mugardos facility.
Huelva LNG facility also completed two reload operations during the month.
LNG World News Staff
LONDON, May 22 /CSRwire/ - Ethical Corporation is excited to announce the launch of its new and improved Sustainability Reporting and Communications Summit (16-17 October 2019). Click here to be the first to access the newly released event brochure – containing the full agenda, speaker line-up and exclusive discounts.
The importance of sustainability reporting and ESG disclosures is increasing across the globe. Investors, NGOs and other key stakeholders are requesting greater transparency and disclosure on both current and future impacts.
The world’s leading Sustainability Reporting and Communications Summit – moving to its new home in Amsterdam, Netherlands – will focus on how companies can fully assess and report their impacts across their whole operations – both now and in the future. Over 300 CEOs, business leaders, investors, Government representatives and NGOs will share the latest reporting and communications strategies that are shaping the future of responsible business.
Key themes include:
Shape future strategies through full-impact assessments: Develop systems and strategies that provide holistic assessments on current and future impacts
Investor preference: Report accurate data, demonstrate long-term value and deliver ESG disclosures fit for Investors
Robust climate-related disclosure: Engage key stakeholders on future climate risks and opportunities through TCFD-driven reporting
Impact-driven communications: Demonstrate leadership and build trust through transparent, impact-driven communications
Navigate the reporting maze: Identify which guidelines, indices and frameworks are most important to your key stakeholders
Click here to be the first to access the newly released event brochure
2019 confirmed speakers include:
Richard Flint, CEO, Yorkshire Water
Frances Way, Chief Strategy Officer, CDP
Richard Batten, Global Chief Corporate Responsibility Officer, JLL
Thomas Hügli, Chief Sustainability Officer, AXA Switzerland
Tony Henshaw, Chief Sustainability Officer, Aditya Birla Group
Tjeerd Krumpelman, Head of Reporting & Stakeholder Engagement, ABN AMRO
Hilde Blomme, Deputy CEO, Accountancy Europe
Janice Lao, Director Corporate Responsibility and Sustainability, The Hongkong and Shanghai Hotels
Vanessa Wright, Group VP Sustainability and Responsibility, Pernod Ricard
Andrew Wallis, Deputy CEO, Aroundtown
Anita McBain, Head of Responsible Investment, M&G
Nicoletta Heilsberger, Senior Manager Sustainability Positioning, Business and Human Rights, Siemens
Daria Goncharova, Chief Sustainability Officer and Head of Non-Financial Reporting, Polymetal International
Ulrika Hasselgren, Global Head of Sustainability & Impact Investment, Danske Bank
Click here to be the first to access the newly released event brochure – containing the full agenda, speaker line-up and exclusive discounts.
For more information about the event contact:
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Ethical Corporation
Read the Announcement
Natural gas prices at the Waha hub in West Texas are negative again this week, for the first time since plunging to an all-time low of minus $4.28 per million British thermal units (MMBtu) in early April, according to data compiled by Reuters.
On Wednesday, next-day natural gas prices at the Waha hub in the Permian dipped to below zero—to minus $0.40 per MMBtu, for the first negative reading since early April.
According to Reuters estimates, Waha natural gas prices averaged just $0.92 per MMBtu so far in 2019, compared to $2.10 in 2018 and a five-year average of $2.80 between 2014 and 2018.
In early April, prices at the Waha hub plummeted to record low negative levels, as pipeline constraints and problems at compressor stations at one pipeline stranded gas produced in the Permian.
Gas production in the Permian has been rising in lockstep with crude oil production, and even though gas takeaway capacity has attracted less media attention, pipeline constraints for natural gas are similar to those of crude oil pipeline capacity.
The natural gas takeaway capacity constraints have resulted in more gas flaring in the Permian on the one hand, and in a record-high spread between the Waha gas hub price and the U.S. benchmark Henry Hub in Louisiana, on the other hand.
The very low natural gas prices in the Permian are dragging down exploration and production (E&P) investment returns in the most prolific U.S. shale oil basin, Moody’s said in a report last month.
The midstream constraints for oil and gas transportation in West Texas and New Mexico have been limiting exploration and production volumes and weakening the realized oil and natural gas prices for producers, Moody’s said in early April.
Case in point: Apache Corporation said in April that it had temporarily delayed natural gas production at its Alpine High play in the Permian in late March to mitigate the impact of the extremely low prices at the Waha hub.
By Tsvetana Paraskova for Oilprice.com
More Top Reasd From Oilprice.com:
UPS trucks powered by renewable natural gas will soon be zooming around Texas.
The multinational shipping giant said Wednesday it is buying 170 million gallon equivalents of renewable natural gas from California-based Clean Energy Fuel Corp. by 2026, the largest commitment of any U.S. company to date to use renewable natural gas, according to UPS.
UPS said its fueling stations in San Antonio, El Paso and Fort Worth, and several other stations in 12 states will fuel UPS delivery trucks with renewable natural gas.
The alternative fuel is produced by taking methane gas released from buried garbage or biomass and processing it into a purified natural gas that can be used as a replacement for traditional transportation fuels.
The deal is part of UPS's strategy to have 40 percent of its ground fleet running on alternative fuels by 2025. The company also has a goal of reducing its greenhouse gas emission from its ground fleet by 12 percent by 2025.
EARLIER:UPS to add electric delivery trucks to fleet
UPS has used more than 28 million gallons of renewable natural gas in its ground fleet since 2014.
The company said that by switching from diesel to renewable natural gas, UPS trucks fueling up at 18 stations will significantly reduce greenhouse gas emissions by as much as 1 million metric tons over the next seven years. This is equivalent to planting 17,000,000 trees and removing 228,000 cars off the road, according to UPS.
Clean Energy Fuels Corp., which describes itself as the largest natural gas provider in North America, says that its product is the first renewable natural gas commercially available for fleets. The natural gas provider has grown sales of renewable gas from 22 million gasoline equivalent gallons in 2014, the first full year it was available, to an expected 100 million gasoline equivalent gallons s in 2018.
The California company has an agreement with BP and others to secure an increased supply of renewable natural gas, a UPS spokeswoman said.
Clean Energy builds and operates 530 stations with compressed natural gas and liquefied natural gas in Canada and the U.S.
RENEWABLE DIESEL: Valero Energy's renewable diesel refinery to see $1.1B in upgrades
Renewable natural gas stations are on the rise in North America as trucking companies look to meet government and company mandates on greenhouse gas emissions. There are 98 operational renewable natural gas sites in the U.S. and Canada, plus another 26 under construction, according to RNG Coalition, a Sacramento member-led nonprofit representing the renewable natural gas industry in North America.
Questerre Energy and Schlumberger Partner on Clean Tech Energy Project - Canada Business News
Questerre Energy Corporation of Alberta is partnering with Schlumberger for its Clean Tech Energy project in Quebec.
Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) is pleased to announce that it has partnered with Schlumberger for its Clean Tech Energy project in Quebec.
Michael Binnion, President and Chief Executive Officer of Questerre, commented, ”Being transparent about the environmental benefits of our Clean Tech Energy project is essential to building trust with our stakeholders and securing social acceptability. We are pleased to work with Schlumberger and their proprietary Stewardship Tool so that our stakeholders can audit these benefits for themselves.”
The Company has secured access to the Schlumberger Stewardship Tool to model and measure the environmental and social impacts of all stages of natural gas production. By modelling development under the Clean Tech Energy approach and comparing this to a more conventional approach, the tool will calculate the significant reduction in emissions, waste and pollution. Questerre intends to make the tool available to all stakeholders to allow them to model and analyze the environmental impacts of its Clean Tech Energy plan for natural gas development.
An investor group that holds about 25% in Texas Pacific Land Trust installed its preferred trustee in a shareholder meeting on Wednesday that the company, one of the biggest landowners in Texas, rejected as invalid.
On Tuesday, Texas Pacific postponed the special meeting where shareholders were due to fill a vacant trustee spot after filing a lawsuit against the investor group’s trustee candidate, Eric Oliver, a source familiar with the matter told Reuters.
After the meeting was held anyway, the company accused the investor group of misleading investors.
“Shareholder meetings may only be called after certain requirements are met, including providing notice and following other procedures,” Texas Pacific said in a statement.”Mr. Oliver’s purported ‘meeting’ was conducted in a secretly-booked conference room with no notice whatsoever provided to the vast majority of the shareholders,” it said.
Eric Oliver is president of hedge fund SoftVest LP, one of the investor group along with Horizon Kinetics LLC and ART-FGT Family Partners.
The group wants to convert Texas Pacific, which has been operating since 1888, into a Delaware corporation subject to modern governance principles, to establish an experienced team around its water business and be more transparent. It also wants to sell off the firm’s portfolio.
The proxy contest illustrates how even strongly performing companies can run afoul of activist investors at a time both experienced corporate agitators and newcomers are pushing corporations to perform better to help boost their own returns.
In this case, the activists hope to cash in on excitement around the Permian basin, which covers Western Texas and parts of Eastern New Mexico and which has been the center of the U.S. shale revolution.
Texas Pacific wants shareholders to elect an independent trustee, and alleges Oliver is misleading shareholders by “making materially misleading statements and failing to disclose material information.”
“The Trust will announce a new date for the special meeting once the claims and issues raised in litigation are resolved”, the company said in a statement.
The competition for a stake in the European gas market is heating up in 2019, which promises to be an important year. The outcome of this contest will have a long-lasting effect. Two interconnected but separate developments are having a substantial impact on Europe’s energy imports. On the one hand, the shale revolution in the U.S. is producing massive amounts of natural gas, which is supercooled as LNG and shipped overseas. On the other hand, Europe's long-time supplier, Gazprom is working on additional pipeline infrastructure such as Nord Stream 2 and Turk Stream to secure its market share in the wake of increased competition.
The American natural gas industry developed itself into a significant exporter and has increased the stakes for Russia’s state-owned energy giant Gazprom. Russian officials, for a long period, were in denial of the negative consequences as a result of American LNG exports. However, Sergei Komlev, the head of contract structuring & price formation for Gazprom Export, recently acknowledged the new situation in Gazprom’s magazine: “it is obvious that LNG will be the main rival in the battle for the European consumer”. Therefore, the construction of both pipelines is of paramount importance for the Russian energy giant.
The missing gas problem
Despite increased competition, Gazprom is still doing good business in Europe. The energy giant managed to export 202 bcm in 2018 and doubled its profit despite efforts to reduce dependency on Russia.
Analysts expect Europe’s dependence on imported natural gas to increase even further due to the depletion of domestic gas fields. Until 2025 a ‘gap’ of approximately 100 bcm will arise which needs to be imported from abroad. There are two options to fulfil the extra demand based on existing or ‘under construction’ infrastructure: LNG or additional supplies from Russia.
According to most analysts, Gazprom’s motivation to construct Nord Stream 2 and Turk Stream is more political than economic due to Moscow’s desire to circumvent Ukraine and punish her for its pro-European stance. However, the fact remains that Gazprom is still mostly dependent on Ukraine’s infrastructure for the majority of its gas sales to European customers. It is in Kiev’s interest to maintain its status as a transit country which provides her significant strategic value and generates $3 billion in annual transit fees for the state’s coffers.Related:
Source: S&P Global Platts
Moscow’s European gas strategy
Gazprom has a gas transit contract with Ukraine’s Naftogaz until January 1st 2020. To put maximum pressure on Kiev, Moscow intends to complete both Nord Stream 2 and Turk Stream before the end of 2019. Depriving Ukraine of its strategic value and income from transit fees would seriously erode its bargaining position vis-à-vis Gazprom for the import of Russian gas and most likely plunge the country into a recession.
However, Denmark delayed the approval to use its EEZ for Nord Stream 2, which is a setback that could postpone the pipeline’s completion. Interfax news agency quoted Nord Stream AG, the company responsible for construction activities, that the project is suffering delays and will go into production in 2020 instead of the end of 2019.
Gazprom could be preparing for what some analysts call the ‘nuclear option’ which will seriously damage Russia’s position as Europe’s most important energy supplier. The intention, however, is to put maximum pressure on Ukraine and remove it permanently from the gas delivery business. To achieve its goal, Gazprom has been filling storages across Europe, including the leasing of additional locations. This way, the energy giant would be able to meet its minimum contractual deliveries to European customers while bypassing Ukraine’s pipeline system.
A difficult decision ahead
The cancellation of deliveries through Naftogaz’ infrastructure would dramatically increase gas prices on the continent due to scarcity and most likely push Ukraine into a recession. In such a situation Kiev would also be unable to buy gas from its European neighbours through reverse flows leading to a disastrous first year in office for Ukraine’s new president Zelensky. Moscow would be betting on the besieged Zelensky to cave in and adhere to the Kremlin’s demands.
Despite the possibility, it remains highly unlikely for Russia to choose this option because it would also significantly damage its reputation as a reliable supplier.
https://oilprice.com/Energy/Energy-General/Moscow-May-Use-Nuclear-Option-In-European-Gas-Race.html
U.S. energy company Sempra Energy asked U.S. energy regulators for more time to complete its $10 billion Cameron liquefied natural gas (LNG) export terminal in Louisiana.
The U.S. Federal Energy Regulatory Commission (FERC) approved construction of three liquefaction trains at Cameron on June 19, 2014. That order required the project be completed within five years.
Sempra said the first train at Cameron started producing LNG earlier in May and is expected to export its first cargo in coming weeks.
The company has said Cameron Trains 2 and 3 will enter service in the first and second quarters of 2020.
Sempra asked FERC for a 15-month extension to put the full plant into service until Sept. 19, 2020.
Separately, Saudi Aramco signed a 20-year agreement on Wednesday to buy LNG from Sempra’s proposed Port Arthur LNG export plant in Texas.
The first three trains at Cameron will produce about 12 million tonnes per annum (MTPA) of LNG, or roughly 1.7 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day.
Cameron is jointly owned by affiliates of Sempra, Total SA, Mitsui & Co Ltd, and Japan LNG Investment LLC, a company jointly owned by Mitsubishi Corp and Nippon Yusen Kabushiki Kaisha (NYK). Sempra indirectly owns 50.2% of Cameron.
McDermott International Inc and Chiyoda Corp are the lead contractors at Cameron.
Sempra has a long-term goal of exporting 45 MTPA of North American LNG and is developing a second two-train phase at Cameron, the Port Arthur LNG export terminal in Texas and plans to add export facilities in two phases at its existing Costa Azul LNG import terminal in Baja California in Mexico.
PetroChina is bucking normal practice and raising its wholesale natural gas prices during the weak-demand spring season, several sources said, preparing for the coming consolidation of China’s pipeline assets and trying to recoup huge fuel import losses.
The increases from PetroChina - which supplies more than 70 percent of China’s gas - come as spring brings warmer temperatures, when demand and prices typically fall.
PetroChina is also under pressure to recoup continuing losses from its gas import business due to high input costs versus government-capped domestic prices, sources with knowledge of the matter said.
PetroChina lost 3.3 billion yuan ($480 million) on its gas imports in the first quarter of this year due to high fuel costs. Over 2018, the Chinese major incurred a net loss on its gas imports of nearly 25 billion yuan.
“Anticipating the launch of the national pipeline group in the third quarter that will take away a business with massive guaranteed revenues, the company wants to bide the time paring losses in the gas import business,” said a gas official with a state oil giant.
PetroChina’s gas import business has suffered losses for years because its import costs - especially supplies of liquefied natural gas (LNG) under long-term contracts - often exceed government-capped domestic prices, according to PetroChina sources and analysts.
PetroChina also wants to compensate for expected revenue erosion from a spin-off of some of its assets once a national pipeline group is formed as part of a reform of the oil and gas sector, three company sources and two analysts said.
PetroChina needs the extra income to make “investments in the downstream gas distribution sector as it prepares to spin off pipeline assets,” said Wang Haohao, gas analyst with consultancy Zibo Longzhong.
Beijing plans to launch this year a national oil and gas pipeline company that will combine assets from PetroChina, China National Offshore Oil Corporation (CNOOC) and Sinopec, a move aimed at spurring private and foreign exploration investment.
The price increases sought would apply to wholesale rates that PetroChina charges provincial piped-gas distributors, power plants and big industrial users such as fertilizer producers.
PetroChina expects to agree with buyers to prices about 6.4% above government-set city-gate prices for gas from conventional domestic fields and imports by pipeline from Central Asia, which together make up more than 60% of PetroChina’s total gas supplies, said three of the sources.
The proposed increase - compared with a 20% rise PetroChina was asking for - comes out of negotiations between PetroChina and buyers, with mediation by state planner the National Development & Reform Commission (NDRC), said one of the sources.
All the sources spoke on condition of anonymity because they are not authorized to speak to the media.
PetroChina normally prices gas at a discount or flat to city-gate levels in the spring as demand ebbs in warmer weather.
For supplies of higher-cost LNG imports and domestic shale gas output, PetroChina still aims to raise prices by up to 30% above city-gate levels, said the three sources.
NDRC did not respond to a faxed request for comment. PetroChina did not respond to emails.
FIRST INCREASES IN APRIL
With a goal to sign up annual supply deals with buyers by end of June, PetroChina, the listed arm of state-owned China National Petroleum Corporation (CNPC), started raising prices with some customers of LNG or shale gas in April.
A listed fertilizer producer in Sichuan province received a 10% price rise for its baseload supply contract to 1.6 yuan per cubic meters, said a plant manager with the company, declining to be named as he is not authorized to talk to media.
Additional supplies on a spot basis rose by more than 20% from April to around 1.8 yuan a cubic meters, the manager said.
In some cases, the price increases have faced resistance.
Shaanxi Gas Group, a provincial utility, said it had reduced its gas intake because of a PetroChina price hike.
“We are not able to agree on the (gas) price and volume,” said a Shaanxi Gas manager who also declined to be named.
Shaanxi Gas Group did not respond to a request for comment.
BP is nearing the sale of its stake in a major Egyptian oil and gas company to Dubai-based Dragon Oil for over $600 million, industry and banking sources said.
The sale, which is expected to complete in the coming weeks, would mark the end of BP’s 50-year-old partnership in the Gulf of Suez Petroleum Company (GUPCO) as the London-based company focuses on developing Egypt’s large offshore gas reserves.
Dragon Oil, a subsidiary of Dubai’s Emirates National Oil Company (ENOC), has said it plans to expand its international operations and boost its production to 300,000 barrels of oil equivalent per day by 2025.
GUPCO produces over 70,000 barrels per day of oil and 400 million cubic feet per day of gas, the sources said.
A BP spokesman declined to comment. The Egyptian Petroleum Ministry and the Egyptian General Petroleum Corporation (EGPC) had no immediate comment. ENOC could not be reached for comment.
The GUPCO sale has received the initial approval of Egypt’s Petroleum Ministry after it had objected to an agreement BP had reached last year with North African-focused oil and gas company SDX Energy to buy the asset, one of the sources said.
Dragon Oil’s main asset is Turkmenistan’s Cheleken field, where it produces close to 90,000 bpd. In Egypt, it has a 100% interest in the East Zeit Bay block.
The cash raised from the sale will help BP towards its goal of selling more than $5 billion of assets following the $10.5 billion acquisition of BHP’s onshore oil and gas assets in the United States last year.
BP’s total net production in Egypt reached 49,000 bpd of oil and gas liquids and 878 million cubic feet per day of gas in 2018, according to its annual report.
In February, BP launched the Giza/Fayoum field in the West Nile Delta offshore area which is expected to produce around 60,000 boe/d.
The project, which is being carried out by Jersey Electricity, follows another scheme to fit a large number of panels to the roof of La Collette power station. The power generated will be put into the Island’s grid.
However, the company says that neither of the solar-panel projects will reduce its carbon output. They say the current set-up allows for an almost completely ‘decarbonised’ supply.
Around 95% of the Island’s power is imported from France – with 34% being generated by the hydroelectric La Rance tidal barrage near Dinard and 66% coming from nuclear sources. The other 5% is generated locally by the energy-from-waste plant at La Collette.
Chris Ambler, chief executive of Jersey Electricity, said that solar technology was becoming more affordable.
‘This latest solar endeavour is the next of a series that we are looking at that will diversify energy sources to include local renewables.
‘Jersey already benefits from an almost completely decarbonised power supply, a third of which is already from renewable hydro-electric sources,’ he said.
‘Solar PV, however, is becoming more economical and sits comfortably alongside our existing imported decarbonised power.
‘We installed our own array on the Powerhouse six years ago from which we have learned a great deal, and last year announced plans to facilitate a larger scale pilot export-only, ground-mounted solar farm which is progressing.’
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And Mr Ambler added that the panels were being installed as a result of demand from Islanders for locally-based renewable energy sources.
‘We are seeing an increasing appetite for locally-generated renewable electricity,’ he said.
‘Solar PV sits comfortably with our existing imported decarbonised power and we wish to continue our support for the Energy Plan – Pathway 2050, which states a preference for moving towards renewable sources of energy where it can be justified on grounds of economics, security and sustainability.’
It is anticipated that both the La Collette and Queen’s Road project will generate 150,000kWh each year – enough to power 21 homes or power a Nissan Leaf electric car for 630,000 miles. There are no plans for electric charging stations under the proposed solar panels at the moment.
Norwegian-made REC solar panels will be used in the car park project. A total of 96% of the Scandinavian country’s electricity is derived from hydroelectric sources.
The car ports are being manufactured by Giulio Barbieri Outdoor Solutions in Ferrara, Italy.
Rare earths producer Lynas Corp on Tuesday unveiled detailed plans to spend A$500 million ($346 million) to boost production and set up an initial processing facility in Western Australia.
Lynas expects that its growth plan out to 2025 will help it overcome political headwinds in Malaysia where its operating licence, due for renewal in September, is under threat on concerns over waste disposal.
Lynas will invest in the Malaysian plant and also build out a heavy metals separation facility in the United States as part of its strategy, company officials said during an investor briefing.
Shares in Lynas, which in March rebuffed a $1.1 billion takeover offer from Australian conglomerate Wesfarmers Ltd , surged as much as 16% to a six-month high on the Australian Securities Exchange.
“We have a great deal of confidence that the (Malaysian) government wants Lynas to continue to operate,” Chief Executive Amanda Lacase said, noting support from its prime minister as well as the Australian, Japanese, and U.S. governments given the strategic importance of rare earths.
Lynas mines rare earth minerals in Western Australia and processes them at the Malaysian facility. In December, the country’s environment minister said that Lynas must remove its waste stockpiles before its licence could be renewed.
Lynas has maintained that it would not be possible for it to remove the waste within such a short time frame.
Dato Mashal Ahmad, vice president of Lynas’s Malaysian operations, said during the briefing that as required under the company’s licence Lynas had found an end use for the waste as a fertiliser component.
If that failed, it could set up a permanent disposal facility as per the licence conditions and the government could choose its preferred option.
“There is no more issue. We are given permission to continue operation,” Ahmad said, referring to supportive comments made by the Malaysian Prime Minister Mahathir Mohamad in April.
The spending plan comes as concerns mount that supplies of rare earths, used in everything from consumer electronics to military equipment supply, could be impacted by the Sino-U.S. trade dispute. China produces about three quarters of the world’s neodymium and praseodymium (NdPr), used in magnets for electric motors.
“The geopolitics is highlighting the value of Lynas’ reliable supply,” said Matthew Ryland at Greencape Capital, the company’s second-biggest shareholder.
Lynas said it expects NdPr consumption to accelerate from 2021 because of demand from electric vehicles.
The company plans to increase NdPr production to 10,500 tonnes a year, up from an annualised rate of about 6,300 tonnes in the March quarter.
Company officials also said during the briefing that they were choosing between two sites for Lynas’s initial ore processing facility, near its Australian mine at Mount Weld, or near the mining hub of Kalgoorlie in Western Australia.
On Monday, Lynas said it would develop the heavy metals separation facility in the United States with Texas-based Blue Line Corp.
Glencore Plc will supply cobalt feedstock to restart First Cobalt Corp’s refinery in Canada, the companies said in a statement on Tuesday.
Glencore’s unit plans to provide feedstock for the refinery, which is expected to result in an annual production of about 2,000 to 2,500 tonnes per annum of cobalt in sulfate from the refinery.
The First Cobalt refinery in Ontario, 600 km from the U.S. border, has the potential to produce either a cobalt sulfate for the lithium-ion battery market or cobalt metal for the North American industrial and military applications.
Once operational, the refinery would become the only North American producer of refined cobalt for electric vehicle market.
Glencore said it will also evaluate providing a loan to fund the capital needs to restart the refinery, and the two companies will look to speed up the restart.
The refinery could be operational in 18-24 months and discussions are under way with provincial government officials to streamline and accelerate the permit amendment process, the companies said.
A final decision on whether to put the First Cobalt Refinery back into production has not yet been made and any decision depends on the outcome of the ongoing discussions and studies, the companies said.
China approved its first batch of subsidy-free wind and solar projects with a combined capacity of 20.76 gigawatts (GW), the country’s top planning agency said on Wednesday.
That follows China’s vow in January to launch a series of unsubsidized renewable power projects this year to tackle a payment backlog amid a decline in construction costs in the sector.
The National Development and Reform Commission (NDRC) also urged grid companies to sign long-term power purchase contracts with operators of the unsubsidized renewable projects, it said in a statement.
A total of 56 wind power projects, 168 solar power projects and 26 pilot distributed renewable projects in 16 cities and regions in China were approved by the NDRC.
By April, China had installed wind power capacity of 280 GW and solar capacity 130 GW, official data showed.
Australian lithium miner Kidman Resources on Thursday agreed to be acquired by Wesfarmers for A$776 million ($534 million) in a deal that will give the retail conglomerate entry into the booming electric vehicle market.
The two companies entered into a scheme implementation deed after Wesfarmers, which launched its bid for Kidman earlier this month, completed due diligence, the parties said in separate statements.
The A$1.90 per share bid is subject to a shareholder vote, which is likely to be held in August, the lithium miner said. Kidman directors and major shareholders plan to support to the deal.
“The Kidman Board has concluded unanimously that realisation of a significant premium to the undisturbed market value ... is in the best interests of all our shareholders,” Kidman Chairman John Pizzey said.
The offer was pitched at a 47 percent premium to Kidman’s last closing price on May 1.
Wesfarmers said it expects to spend about A$700 million to develop Kidman’s Mt Holland lithium project, with first production of lithium hydroxide targeted in the second half of 2022.
The conglomerate has also signed an agreement with Sociedad Química y Minera de Chile S.A (SQM), Kidman’s joint venture partner at Mt Holland, which would prevent the Chilean company from entering talks with any party proposing to make a competing offer for Kidman.
Wesfarmers’ bid for Kidman followed closely on a $1.1 billion offer for rare earths producer Lynas Corp, which has so far strenuously fended off its suitor.
SQM, the world’s No. 2 producer of lithium, said on Thursday that first-quarter earnings dropped by nearly one-third on a slump in prices of the ultralight battery metal and a spike in royalties at its operations in Chile.
SQM reported quarterly earnings fell to $80.5 million from $113.8 million during the same period the previous year.
SQM Chief Executive Officer Ricardo Ramos attributed much of the decline to “lower margins in the lithium business line.”
The Chilean miner sold lithium at an average price of $14,600 per tonne, it said, an 8 percent drop from the fourth quarter of 2018.
“As expected, during the first quarter, the lithium market saw price pressure as new supply entered the market,” Ramos said.
He added that new royalties put in place by Chilean development agency Corfo last year, considered to be the highest in the world, also dinged profitability.
Payments to Corfo nearly quadrupled, from $12 million to $45 million, according to SQM’s earnings statement.
SQM last year struck a deal with the government to more than triple production by 2025 in exchange for paying sharply higher royalties and offering discounted lithium to domestic value-added producers of battery components.
Ramos said global demand for lithium, a key component in the batteries that power electric vehicles and cell phones, would increase 17 percent this year, in line with the company’s previous forecast.
The company expects to produce 60,000 tonnes of lithium in 2019, with sales volumes this year reaching between 45,000 and 50,000 tonnes.
By 2020, SQM predicts that sales volumes would jump 30 percent over 2019, reaching approximately 65,000 metric tons.
The company earlier this year received environmental approvals for a $400 million plant expansion. Once completed, it would allow the Chinese-backed SQM to eventually produce as much as 180,000 tonnes of lithium carbonate from its Salar de Atacama operations in Chile.
China’s Tianqi Lithium Corp bought a nearly 24 percent stake in the firm last year.
Chile’s SQM, the world’s No. 2 producer of lithium, said on Thursday it would delay a key expansion of production capacity from the Atacama salt flat until the end of 2021 amid a slump in prices for the coveted battery metal.
Prices remained firm in WA during May 6 and May 13, with buyers still getting enough stock at current bids.
Meat and Livestock Australia’s weekly processor throughput data showed strong rebound in volumes for the week after Anzac Day and Easter, putting volumes similar to the same time last year.
East coast sheep and lamb markets continued to climb, with reduced selling due to both rain and the normal contraction of supplies at this time of year.
Crossbred lambs are bid $8/kg spot on the border of New South Wales and Victoria (at Smiths TMP) and $7.80/kg in South Australia (at JBS), with private buyers in Victoria offering similar numbers. Mutton has also had increased interest with Thomas Foods at $6 in NSW and $5.80 in SA.
MLA’s over the hook indicators for South Australia and Victoria have jumped strongly to catch up to NSW, putting them all between 470–500¢.
Booking space is now available in most east coast markets for coming weeks, rather than several weeks out, due to low supplies.
WA cattle markets are seeing increased numbers from feedlots with Butterfield (at Borden) at $3/kg (up 10¢).
WA saleyards were firmer for steers this week too, with exporters looking to fill upcoming boats.
On the east coast, the cattle market continues to show strength.
NSW liveweight prices are $3.30/kg for Angus. In Queensland, there are export orders out for high quality Brahman steers at $2.65/kg.
Processors are bidding $5.80/kg for MSA and grain-fed finished cattle in NSW (at Wingham Beef Exports, Bindaree Beef and Teys). Queensland numbers are similar.
Last, the Federal Government released its live export numbers for April earlier this week.
Cattle exports were 88,000, down 10,000 on March, while sheep exports were up 13,000 to 140,000.
Of the sheep exports, 35,000 went to Qatar, 48,000 to Kuwait and 19,000 to the UAE (all from Fremantle).
In cattle, 19,000 went to Indonesia and China from Darwin and Portland, respectively.
Another other 13,000 went from Broome to Indonesia and 9000 went from Townsville to Vietnam.
Other comments:
Goat prices have continued to jump with Thomas Foods International increasing their SA bid by a further $0.80 to $9.20 in SA
In other April live exports:
24 Alpacas went to South Korea
16 goats went to Russia, 100 to Sri Lanka, 125 to Malaysia, 1,503 to China and 62 to Nepal, via air.
The LIVEstock Pricing app has been updated and now offers a historical updates feed and MLA saleyards updates, activated via the market updates setting option.
This means you can scroll back through past dates and see what has happened in the market
''In the next five to 10 years, it is really hard for me to say why that product is needed.
"It wouldn't be a particularly good economic decision."
Difficult to create shareholder value
The CEO of rival potash and fertiliser producer Nutrien, Charles Magro, said demand for potash would be higher in seven or eight years' time, which he said was the earliest that BHP could realistically bring Jansen into production.
But BHP would still find it hard to make money from potash. "Every time that a company has tried to build greenfield potash mines around the world, it has been a very difficult project to create long-term shareholder value,'' he said.
New potash projects in Belarus and the Ukraine are expected to be in production before Jansen but Green Markets research director Alexis Maxwell told a conference in April that Jansen was "the biggest threat to the potash long-term outlook".
Ms Maxwell said she did not expect Jansen to be produce potash before 2024, and rival producers would try to ensure prices did not rise enough to be an incentive for BHP to development.
"We've seen some of their competitors indicate that they will ramp up low-cost production and lower prices to help keep the profitability of Jansen, help keep those tonnes out of the market," she said on April 16.
Asked by the The Australian Financial Review to elaborate on those comments, Ms Maxwell said big North American producers could easily bring on twice as much production as the first stage of Jansen, which is slated to be about 4.5 million tonnes a year.
''Should potash producers be able to run at full nameplate capacity – though we note there are significant mine shaft and mechanical limitations to operating at full nameplate capacity – you could see the region bring on about 8 to 10 [million tonnes] of additional potash production,'' she said.
Mr Magro backed that thesis, saying Nutrien had incremental supply it could put into the market.
"We have 5 million tonnes that have been bought and paid for by our shareholders and our intention is that as the market grows we will put those tonnes into the market," he said.
Risk of oversupply
Mr O'Rourke also highlighted the "incremental production and residual production" Mosaic and Nutrien had available to them. "Between those two [companies] they can account for the growth over the next five years,'' he said.
BHP believes potash demand will rise by 2 per cent to 3 per cent in the 2020s as the agricultural sector struggles to satisfy the changing diets of a rising global population with less arable land.
BHP CEO Andrew Mackenzie had been in the top job for barely 100 days when in August 2013 he announced $US2.6 billion spending on building shafts at Jansen. That spending has slowed amid weak potash prices, and BHP is expected to take another 18 months to complete the Jansen shafts.
Mr Mackenzie told investors in Barcelona last week that BHP had invested too much to fast with that 2013 decision.
''As our thinking around the project’s initial scope has evolved, I acknowledge we over-invested to date. However, Jansen remains an attractive option for BHP given its strategic fit, risk-return metrics and the longer=term optionality the initial investment would create,'' he said.
Mr Fagan said he believed the BHP board was likely to approve the first phase of Jansen "within 18 months".
"Board approval can occur prior to shaft completion, as surface infrastructure construction can begin independently," he said in a note.
BHP described Jansen in a presentation last week as being a "tier one" asset in a stable jurisdiction with low operating costs, which had low risks but would also deliver relatively low returns compared to other investment options.
BHP listed the risk of market oversupply and the high capital cost as being among the considerations ahead of the investment decision.
BHP said the second and third stages of Jansen would each bring a further 4 million tonnes of potash capacity into the market at an estimated cost of $US4 billion for each stage.
But BHP said the second and third stages of Jansen were not expected to be developed within the next 15 years.
Tanzania is in the middle of its parliamentary budget session in the nation’s de jure capital Dodoma slap-bang in the middle of the sprawling country of some 56 million souls.
Being debated in the august House are the financial and other budgetary proposals of government ministries for different sectors of the Economy, ranging from the largely administrative (Education, Prime Minister’s Office, etc.) to the earthly – like Agriculture...
Talking of Agriculture – generally defined as “the science and practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food and other products” – the sector is widely acknowledged as crucial to meaningful and sustainable socioeconomic development on the ground.
Indeed, Agriculture is arguably the largest and most important sector of the Tanzanian economy, with the country benefitting from a diverse production base that includes livestock, staple food crops and a variety of cash crops for both the domestic and export markets.
The sector’s contribution to GDP has more than tripled in the last 10 years to 2018, supported by rising cash crops production, an emerging agro-processing segment and strong domestic demand for processed food.
However – according to ‘The Report: Tanzania 2018’ by the Oxford Business Group – farmers and other sector stakeholders face considerable challenges in modernising Agriculture to increase yields and value-added processing, as well as exports.
Nonetheless, the report cautions that diversity of Agriculture leaves the sector well-positioned to benefit from substantial investment inflows in the coming years, with budget announcements highlighting its critical importance to jobs creation, industrialisation and exports.
Functional budgeting
That’s right: functional budgeting is crucial to meaningful and sustainable agricultural development.
But, for that to work as envisioned and required, funding and other material and moral support to the sector must trickle down to small-scale farmers as a matter of course.
In fact, this concept had already been acknowledged, and was in the initial stages of being concretized within the context of the Southern Agricultural Growth Corridor of Tanzania (Sagcot).
As we reported on Friday, the chief executive officer of the Sagcot Catalyst Trust Fund, Mr John Kyaruzi, said “the ultimate aim of the government is to see smallholder farmers become a powerful component of Agriculture – and NOT continue to be used as guinea pigs!”
It is a bit surprising, therefore, that the very same government would withdraw already pledged funding for smallholders under the Sagcot programme.
Indeed, it is somewhat consternating that it did so only because of delays in concluding a financing modality with the World Bank involving the goodly sum of $47 million in a “Matching Grant Fund to equal private investment.”
In the event, the expectations of thousands of smallholder farmers in Tanzania to secure vital capital for agricultural activities have dissolved in bureaucratic mishmash.
This setback aside, we take comfort in knowing that the government is nonetheless mulling all-inclusive options that would further strengthen Agriculture as the backbone of Tanzania’s economy.
Chicago corn jumped to its highest since June on Monday, rising for a sixth session in a row as planting delays across parts of the U.S. Midwest underpinned the market.
Wheat climbed more than 1 percent as investors covered short positions.
The most-active corn contract on the Chicago Board of Trade rose 1.5% to $3.89 a bushel by 0254 GMT, after hitting its highest since early June 2018 at $3.89-1/4 a bushel earlier in the session.
Wheat was up 1.3% at $4.71-1/4 a bushel, after closing down 0.4 percent on Friday and soybeans added nearly 1.3% at $8.32 a bushel after dropping 2.1% in the last session.
“The talk between traders is that “prevented planted” acres for corn may be as high as 5 million acres,” said Ole Houe, director of advisory services at brokerage IKON Commodities.
“Whereas in the past, we have never seen it above 3.6 million acres and then there is the debate over “yield drag” from later planted corn.”
Showers over the next 10 days are threatening to further slow planting from the Dakotas to Illinois, regions that have endured torrential rain this spring, the Commodity Weather Group said.
The delayed planting season across much of North America is starting to cause economic ripple effects along the farm supply chain.
Executives at agricultural equipment maker Deere & Co on Friday warned that farmers are becoming “much more cautious about making major purchases,” in part because of the weather impact on planting.
The market is awaiting the U.S. Department of Agriculture’s next crop planting update due later on Monday to see whether farmers made much headway during relatively drier conditions last week.
The United States is likely to permanently lose soybean export market share in China the longer U.S.-China trade talks drag on, a top executive at the U.S. Soybean Export Council industry group said on Friday.
U.S. soybean exports to China, the world’s top market, plunged 74% last year after Beijing slapped steep tariffs on American beans in July in retaliation for U.S. duties on Chinese goods.
Brazilian farmers are taking advantage of U.S.-China trade tensions.
Soybean trading in Brazil has gained momentum in recent days, driven by a wave of Chinese demand, boosting prices and premiums paid at ports amid a weakening of the Brazilian currency.
Large speculators trimmed their net short position in CBOT corn futures in the week to May 14, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and increased their net short position in soybeans.
https://www.hellenicshippingnews.com/corn-climbs-11-month-high-on-u-s-planting-delays/
The landfill operator Getliņi EKO is considering a possibility to grow medical cannabis as it would ensure higher return than growing tomatoes and cucumbers, said the company’s board chairman Imants Stirāns in an interview with LETA.
He said Getliņi EKO is looking for additional operations because there is energy generated in the waste management process which cannot be used in any other way. Last year Getliņi EKO generated 24 GWH of heating energy and 31 GWH or electricity, and is using surplus energy in its greenhouses, which are a curious sight near a fenced-off trash mound in the outskirts of Rīga.
Stirāns said that growing of medical cannabis would help the company to avoid criticism about distorting competition in the vegetables market.
“Even though our tomatoes are more expensive than tomatoes produced by other companies, we are blamed for distorting competition,” he said, saying that there is a possibility that greenhouses could be closed because of that. Meanwhile, circulation of medical cannabis is strictly regulated and controlled market, and there is no free competition in it, he argued.
The company recently received experts from Denmark who shared their experience in growing medical cannabis.
Medical cannabis is not allowed in Latvia but Lithuania recently made it legal. The European Commission is starting work on legislation in this respect.
“We have Grindex and Olainfarm – why should they purchase the supplies elsewhere if we can produce them ourselves?” said Stirāns, referring to Latvia's large factories of pharmaceuticals.
Getliņi EKO, founded in 1997, manages Getliņi, the largest waste dump in the Baltics, situated in the Stopiņi district near the Latvian capital. The Rīga City Council owns 97.92% of the company shares, and 2.08% is owned by the Stopiņi Municipality.
Getliņi EKO built greenhouses for growing tomatoes, strawberries and flowers at the Getliņi waste dump in 2011 to make use of surplus heat generated by its biogas-fueled combined heat and power plant.
A U.S. judge on Wednesday appointed prominent attorney Kenneth Feinberg as mediator for court-mandated settlement talks in the federal litigation over allegations that Bayer AG’s glyphosate-based Roundup weed killer caused cancer.
Feinberg has been instructed to meet with lawyers for Bayer and plaintiffs within the next 14 days, U.S. District Judge Vince Chhabria in San Francisco said during a court hearing on Wednesday.
Chhabria, who oversees some 900 federal Roundup lawsuits, on April 11 ordered the parties to start confidential mediation. He appointed Feinberg after the parties failed to agree on a mediator.
Feinberg is well known for having facilitated dispute resolutions in high-stakes litigations in the past. He led mediation talks over the September 11th Victim Compensation Fund, the BP Deepwater Horizon disaster, Volkswagen’s diesel emissions scandal and General Motors ignition switch litigation.
Chhabria on Wednesday also scheduled the next federal Roundup trial for February 2020. The case would mark the second bellwether, or test trial, to help determine the range of damages and define settlement options for federal cases.
The judge also wants to prepare some 20 cases currently pending before him for trial and send them to other courts across the country.
More than 13,400 plaintiffs nationwide allege Roundup caused non-Hodgkin’s lymphoma and that the company failed to warn about that risk. The majority of lawsuits are pending in state courts across the country.
Bayer, which acquired Roundup maker Monsanto in a $63 billion deal last year, denies the allegations, saying studies and regulators have deemed glyphosate and Roundup safe for human use.
The company in the past said it would comply with Chhabria’s mediation order in good faith, while believing strongly in the “extensive body of reliable science supporting the safety of Roundup.”
Bayer has also said it would defend itself in all cases and await the appeals process underway for the three cases that have gone to trial and resulted in jury verdicts against it.
A California jury on May 13 awarded $2 billion to a couple alleging Roundup caused their cancer.
In March, a federal jury in San Francisco awarded $80 million to a California man after finding Roundup caused his cancer.
That decision came after another California jury in August 2018 awarded $289 million to a groundskeeper in the first U.S. Roundup trial. That award was later reduced to $78 million.
يشهد قطاع التصميم والمجوهرات نموا وتوسعا كرافد جديد من روافد الاقتصاد الوطني على أيدي رواد أعمال وهواة باتت بصمتهم واضحهم وجهدهم مؤثرا لتنمية هذه الصناعة وتطويرها ليست على المستوى المحلي فحسب بل على المستوى الخارجي،
حيث وقفت الشرق على شراكات لشباب قطريين مع مستثمرين اتراك كما تستعد مجموعة من المصممات القطريات للمشاركة في معرض هونغ كونغ للمجوهرات في شهر سبتمبر المقبل لعرض نماذج من التصاميم والابتكارات القطرية في هذا المجال بأكبر وأقوى المعارض العالمية.
وكشف السيد حمد السليطي، المصمم والمتخصص في صوغ الكهرمان والأحجار الكريمية، عن نمو هذا القطاع بشكل متزايد واستقطابه للمزيد من رواد الأعمال نظرا لما تمثله هذه الصناعية من أهمية اقتصادية ومكانة تاريخية في التراث والثقافة القطرية. وأضاف السليطي في تصريح لـ الشرق بمناسبة افتتاحه أول فرع لصناعة الكهرمان والمشغولات الذهبية بسوق واقف،
بعد أن كان يمارس هذه التجارة كهواية عبر المنصات الالكترونية، أن سوق الكهرمان والأحجار الكريمية في قطر يسقطب العديد من المستثمرين وخاصة الأتراك الذين لايزالون يحافظون على تطور هذه التجارة وتميزها، حيث حضر افتتاح المحل أحد أبرز التجار في اسطنبول والذي يقيم شراكة استراتيجية مع السيد السليطي بهذه الصناعة.
وفي مؤشر على نمو قطاع تصميم المجوهرات وتطور هذا القطاع على أيدي مصممات قطريات محترفات، ودخول هاويات جدد إلى القطاع أكد عدد من المصممات القطريات في حديث لـ الشرق عن آفاق واعدة لهذا القطاع خاصة بعد التجارب الناجحة لمشاركتهن في النسخ الثلاث الأخيرة من معرض الدوحة للمجوهرات والساعات، إلى جانب الدعم الحكومي سواء الذي يتم توفيره للمشاركات في هذا المعرض، أو من خلال دعم بنك قطر للتنمية للناشطات بهذا القطاع.
سوق الكهرمان
وللحديث عن ماتشهده صناعة الكهرمان من تطور على أيدي شباب قطريين متخصصين وهواة التقت الشرق المصمم حمد السليطي، الذي تحدث لنا عن بداياته مع الكهرمان التي تعود الى نحو عشرين سنة توطدت معها علاقة خاصة مع المسابح والأحجار الكريمة منذ أيام الجامعة وقمت بتثقيف نفسي عن هذا المجال من خلال مطالعة كتب الجيولوجيا والأحجار الثمينة وكهرمان، إضافة إلى الخبرة والمعرفة والثقافة المكتسبة من المجتمع والمتداولة بين الهواة،
كما أن مجتمعنا الذي نتحدث عنه مجتمع المسابح والكهرمان منتشر في قطر ومنطقة الخليج والدول العربية وفي تركيا، باعتبار أن هذه الصناعة مرتبطة بتاريخنا وثقافتنا العربية والإسلامية، وكلنا نعرف الاستخدام الديني للمسباح في التسبيح والذي تطور لاحقا إلى استخدامات أخرى منها المتعلق بالزينة والوجاهة وحتى التحف الفنية الثمينة لأنه يوجد من المسابيح ما يعتبر تحفة فنية غالية الثمن،
فتعلمنا أنواع السبح المختلفة والخامات المستخدمة فيها سواء كانت أحجارا كريمة أو كهرمان أو عاجيات أو أخشابا التي تصنع منها المسابيح.
قطاع التحف
وعن التطور الذي شهده قطاع التحف والمجوهرات، بما في ذلك صناعة المسابيح، والتصاميم الحديثة التي أصبحت تستند في الأساس إلى مواكبة ذوق المستهلكين، وهل يواكب الهواة والمصممون الشباب هذا التطور، يقول السليطي: طبعا بالنسبة للمسابح كانت تصنع بالطريقة التقليدية التي تسمى طريقة القوس، حيث لم تكن هناك كهرباء، فكانت توضع القطعة وتتم معالجتها (خراطتها) مثل اللحام، ويشكل خلالها الخرز، وهذه الطريقة التقليدية من يقوم بها اليوم عدد محدود جدا في الوطن العربي،
في حين توجد اليوم أجهزة كهربائية متطورة وحديثة وتتحمل العمل لساعات كثيرة، وأصبحت طريقة تشكيل الخرز نفسها بالالة الحادة من أي خامة، وهذه الأجهزة ساهمت في تطوير صناعة السبح وزيادة الانتاج كما راعت الذوق العام،
كما أصبح المصنعون يستحدثون أصنافا جديدا حسب ذوق الزبائن، مثلا أنا وفقا لذوقي الخاص أريد سبحة كهرمان مطعمة بحبات زمرد أو ألماس أو ياقوت، أو أريد طريقة نحت معين أو طريقة كلاسيكية كشاهد وكخرز، فاليوم هذا الذوق الذي تتميز به تصاميمي أصبح يؤثر في السوق وعلى شاكلتي آخرون كثر، فنحن كهواة لهذه الصناعة نشكل ذوقا عاما، ومع ذلك لايزال الأفضل والمطلوب هو الأشكال الكلاسيكية العادية المعروفة لجميع الناس.
خامات الكهرمان
نحن في كرهم نوفر سبح من جميع الخامات لزبائننا سواء الشباب أو السيدات، ولدينا أشياء نصيغها بأحجار كريمة وذهب مثلما تابعتم أنتم في حسابنا على الانستغرام، ونصنع أساور من عيار 21 ونزلناها في رمضان بأحجام مختلفة، ونحن نركز عملنا أساسا في رمضان لتلبية أذواق الابناء الذين يقبلون في هذا الشهر المبارك على السبح والتحف التراثية ذات الطابع الإسلامي،
ونحرص على التميز في صناعتنا وجميع مشغولاتنا يدوية فالذي يقتني قطع من عندنا يقتني قطعا مقتناة ويصممها ويصيغها متخصصون مجتهدون فيها، وبعض القطع يشتغل فيها اثنين على الأقل لوحدها، وتأخذ وقتا وجهدا، ولذلك نركز على جودة الإنتاج مع محدوديته أكثر من الوفرة مع قلة الجودة.
خطوط الإنتاج
وعن طبيعة الورشة المتخصصة في هذه الصناعة يقول السليطي: نحن لانقدم إنتاجا كبيرا massive product، لأن القطع التي نصيغها من خامات عالية، والكهرمان كما هو معروف خامة غالية يبلغ سعرها في السوق مئات الريالات للغرام الواحد، كخام فقط،
وكسبحة يكلف أكثر، وهذه الخامات رغم غلائها لدينا منها مايكفي، لكن الإنتاج كلها يدوي وبطريقة متقنة مصنعيا، فنحن لانسعى إلى مجرد توفير سبح بل نعتني بالحجم والقياس الذي لابد أن يكون متساويا ومتناسقا، مثلا إذا كانت سبحة من 33 خرزة أو 66 لابد أن تكون متناسقة وبنفس الحجم.
فمثلا إذا كنا في حال استعجال لصناعة سبحة واحدة تأخذ من 3 الى 4 أيام لانها تأخذ شغل ومجهود، ونفس الشيء مع أساور الذهب، الصائغ يحتاج نفس المدة لصياغة الأساور.
وعن الأصناف أو العينات التي ينتجها محل كرهم سواء تعلق الأمر بالسبح أو بالمشغولات الذهبية، يضيف السليطي: خطوط الإنتاج عندنا توفر المسابيح وخامات المسابيح، لأن هناك من الجمهور من يرغب في شراء خامة وتصنيعها حسب ذوقه في أي دولة عربية أو في تركيا من خلال التواصل مع أي فنان أو مصمم،
كما نبيع الأساور (الذهب بالأحجار الكريمة)، إلى جانب كراكيش المسابح سواء من القطن أو الحرير أو الفضة أو الذهب، وهذه يمكن استخدامها كعقود أو للمسابيح. ونحن نصنع كذلك الحلق من الذهب والأحجار الكريمة، وهذه المنتوجات كلها نوفرها لأبنائنا من الشباب والسيدات وحتى للأطفال وتصلنا طلبات كثيرة للأطفال.
وعن قطاع الأبناء أو جمهور المستهلكين الأكثر إقبالا على هذه الصناعة، يضيف السليطي:
تعاملنا الأكثر مع الشباب والسيدات كما أشرت لكم سابقا، وفي رمضان وبحكم مناسبة القرنقعوه القريبة، لدينا طلبات كثيرة من الذهب والأحجار الكريمة فمثلا من بداية رمضان إلى اليوم صنعنا أكثر من 50 قطعة ذهب، ونحن نوفر لزبائنا أشياء مميزة بسرعة وجودة عالية. والآن في رمضان حددنا 5 أحجار هي المرجان (لونين أحمر ووري) والكهرمان والملكايت (اللون الأخضر) والفيروز (اللون الأزرق).
ونحن نتعامل مع السوق القطري الذي يتطلع دائما للأشياء المميزة سواء من القطريين أو المقيمين أو حتى الأجانب هناك أجانب يطلبون منا مقتنيات تراثية قطرية والحمد لله نحن أسعارنا في متناول الجميع ونغطي شريحة زبائن كبيرة.
بالنظر الى حجم السوق والطلب على هذه الصناعة ماهي مستويات الاسعار لديكم، وبتجديد أوضح ماهو أعلى سعر وأدنى سعر عرضتم به هذه المنتوجات؟
لدينا أسعار متفاوتة حسب كل سبحة ومصنعية، فمثلا بالنسبة للسبح لدينا أسعار تتراوح مابين 100 ألف ريال و 400 ريال ومابينهما حسب كل قطعة، وبالنسبة للأساور لدينا أساور في حدود 900 ريال وهذه الأساور فيها ذهب نحو 3 غرامات وكذلك أحجار كريمة أختارها أنا بنفسي.
في ضوء هذا الطلب والتوسع، ماذا عن مشاركاتكم وحضوركم في المعارض ومنصات التسوق المحلية؟
نحن بدأنا مشاركاتنا في معرض مسابيح الكهرمان في كتارا الذي أقيم في يناير 2019 والذي عرف مشاركة خمس دول من بينها تركيا والكويت وليتوانيا وبولاندا ولاتيفيا، وكانت هذه أول انطلاقة لكرهم، واستفدنا من هذه المشاركة سواء من حيث حجم المبيعات أو من خلال التعرف على عملاء وأبناء جدد، ونحن اليوم نفتتح محلنا الجديد بسوق واقف، وتواجدنا هنا سيوفر الطلب للجميع.
وفي مجال الشراكة نحن نستورد الكهرمان من منطقة بحر البلطيق شمال اوروبا التي تضم العديد من الدول التي لدينا فيها مصادر نتعامل معها كما لدينا مصنعين في دول عربية وفي تركيا لاننا نشترى أحجارا وعاجيات ومرجان وأخشاب خام، وكل هذه من شركاء معتمدين ومعروفين. ولاسيما في تركيا التي يتواجد معنا اليوم أحد تجار اسطنبول المعروفين في مجال السبح والكهرمان والخامات الأخرى. ونحن مجتمع نعرف بعض ونتعامل مع بعض في الخامات هذا، ولدينا تجمع سنوي وزيارات لتبادل الخبرات، وكل ذلك لخدمة هذه الهواية وأصحابها ولنشجع بعضنا البعض.
وعن ما إذا كان اختيار سوق واقف نتيجة لدراسة معينة، يؤكد السليطي على أن هذه الصنعة هي صنعة تراثية ثرية وافضل مكان نتواجد فيه هو سوق واقف، ولاشك أن بنك التنمية وغيره من المؤسسات الداعمة لاتقصر في موضوع الدعم،
ويكفي من هذا الدعم ماتوفره الحكومة من خلال سوق واقف الذي نتواجد به، فهو سوق حكومي بإيجارات رمزية وهو مدعوم من الدولة ونحن نشكر الحكومة والدولة على هذا الدعم، وهو مايشجع النشاط التجاري في الدولة بشكل عام وفي سوق واقف بشكل خاص.
وبالسؤال عن ما إذا كانوا يفكرون كهواة في تأسيس جمعية خاصة لهواة الكهرمان، قال السليطي إنه يجري الترتيب مع مؤسسة الحي الثقافي كتارا لتأسيس جمعية لهواة المسابح، وقد طلبنا والفكرة مطروحة وتواصلنا مع الدكتور خالد السليطي رئيس المؤسسة، وقد شجعنا على الفكرة، ولانزال في مرحلة الدراسة ونتعاون في الإجراءات بصدد الجمعية التي ستظهر للنور عما قريب إن شاء الله.
بنك قطر للتنمية يرعى مشاركة المصممات القطريات في معرض هونغ كونغ
تصاميم قطرية تلبي احتياجات السوق وتتجه إلى العالمية
وفي هذا الصدد تحدثت مصممة المجوهرات، فجر العطية لـ الشرق عن تجربتها وتطور هذه التجربة التي بدأت كهواية تستلهم التراث القطري وخاصة الأزهار التي لها مكانتها الخاصة في قلوب المجتمع وماتعبر عنه من حب وعاطفة وود تجاه الآخر، ولذا بدأت التجربة مع زهرة النثل التي تعتبر من النباتات القطرية المتميزة بأوراقها الخضراء لتتشكل بعد ذلك ماركة تجارية (براند) تحمل المسمى الإيطالي (تيفوليو)
وقد تم اختيار هذا الاسم لوقعه الجميل على السامع ولقابليته للانتشار محليا وعالميا. وعن الوسائل المستخدمة في صناعة هذه الماركة، تضيف أنها تستخدم في ماركتها الألماس بالأحجار الكريمة ومنها العقيق، والصدف والفيروز والملكايت (الحجر الأخضر الجميل)، منوهة إلى أن استخدام هذه الأحجار الكريمة يضفي لونا وبهجة على القطع الفنية، هذا إلى جانب القيمة الجمالية التي نجدها في القطع المصممة على شكل وردة من الذهب والتي تستهوي الكثير من الناس.
وعن مدى تواجد ماركة تيفوليو في السوق أوضحت المصممة فجر أن المشاركات في المعارض المحلية والاستفادة من منصات مواقع التواصل الاجتماعي تساهم بشكل كبير في انتشار الماركة محليا وعالميا.
الدعم والرعاية
وعن الدعم الذي يوفره معرض الدوحة للمجوهرات والساعات للمصممين القطريين قالت المصممة فجر إن المشاركات بهذه المعرض توفر عائدا كبيرا للمصممين القطريين وقد مثل نقلة نوعية كبيرة لهم من خلال قسم المصممين القطريين بالمعرض، سواء من خلال حجم المبيعات أو من خلال انتشار الماركة في السوق.
ونوهت بدعم بنك قطر للتنمية الذي قدمه للمصممات خلال المعرض حيث أعلن برنامج تصدير بالبنك عن تكفله بدعم مشاركات المصممات القطرية في المعارض الخارجية، والآن يقومون بتجهيز مشاركة للمصممات القطريات في معرض هونغ كونغ للمجوهرات المقرر عقده في شهر سبتمبر المقبل.
وعن العمل المشترك للمصممات القطريات أضافت أنه يجري التفكير دائما في العمل المشترك من خلال العرض في مكان واحد خاصة مع وجود معوقات تسويقية أبرزها هامش الربح العالي الذي تطلبه المحلات التجارية وقد وجدنا حلا لهذه المعوق حيث تواصلت معنا مؤخرا إدارة مول الحزم وبحثنا في فتح ركن للمجوهرات القطرية في المول، ونحن في انتظار تجهيز المكان حاليا.
حجم السوق
وعن حجم السوق الذي تستهدفه المصممات القطريات، قالت المصممة فجر إن السوق القطري للمجوهرات سوق عالمي والاقبال عليه كبير جدا، ويكفي أن ننظر إلى المبيعات العالية لمعرض الدوحة للمجوهرات والذي بلغت قيمة معروضات نحو 8 مليارات ريال،
ونحن كمصممين قطريين لدينا مختلف التصاميم ولاتوجد بيننا منافسة لأن كل مصمم لديه بصمته الخاصة وجمهوره الخاص وشريحة مهتمة بالصنف المعروض من المجوهرات، ونحن نرى أن القطاع ينمو ويتوسع ونحن نجد أسماء جديدة تدخل السوق ولديهم حماس للانخراط في هذا المجال.
تصاميم مختلفة
ومن جانبها تحدثت مصممة المجوهرات سارة الحمادي لـ الشرق عن تجربتها التي بدأتها منذ سبع سنوات بالرسم كهواية، ومع هوايتها الفنية التي نمت وتطورت بدأت بتصميم المجوهرات مستفيدة من الدعم الذي وجدته من الأسرة وخاصة الوالدة التي كانت تصمم لها مجوهراتها الخاصة. وبعد سنتين من التجربة وتطوير المهارات قامت بفتح محل للمجوهرات يعرض اليوم أحدث التصاميم التي تنفذها هي شخصيا وبمختلف الأشكال التي تراعي جميع الأذواق.
وأضافت المصممة سارة أن الاقبال على إنتاج المصممات القطريات جيد وهناك مشترون يحبون المجوهرات ويميلون إلى البساطة والأشكال الكلاسيكية، كما يميل البعض الآخر إلى التصاميم التي تكون بالألماس والذهب الأبيض والأصفر، والتصاميم التي تستوحي أفكارها من الفن الإسلامي.
وتنوه المصممة سارة الحمادي بما وفره معرض الدوحة للمجوهرات من فرصة للمصممين لعرض ابتكاراتهم، مشيرة إلى أن السوق قوي ولدى بنات قطر دور داعم للمصممات من خلال الاقبال الكبير على هذه التصاميم التي تكون بسيطة أو بالذهب، مضيفة أن التواصل بين المصممات قائم لكن لكل مصممة بصمتها الخاصة وطريقتها الخاصة في إدارة إنتاجها في هذا المجال.
مجوهرات نوف
وفي معرض حديثها لـ الشرق عن تجربتها في هذا القطاع، قالت مصممة المجوهرات نوف المير إن تصاميمها تمثل براند قطرية تجمع في تصاميمها بين التراث والأصالة، ولذلك تكون أفكارها دائما من تراثنا العربي كالسيف والخيل، مع الحرص على أن يكون التصميم حديثا وملبيا لأذواق الجمهور، وهذا ما يميز مجوهرات نوف. وعن دور المعارض في دعم المصممين القطريين تضيف المصممة نوف أن المعارض لها أثر كبير في نجاحها وهو يقدم دعما كبيرا لنا كمصممين وحافزا لتقديم الأفضل.
وعن حجم السوق واستيعابه للتصاميم الجديدة تقول المصممة نوف إن السوق القطري متنوع وهناك العديد من المصممين القطريين المبدعين في أفكارهم، وكل منهم مختلف عن الآخر، وهذا ما يجعل المنافسة أعلى، مضيفة أن هذا مايجعل التفكير في تقديم التصاميم الجديدة والمختلفة لكي يحافظ كل مصمم على تميزه عن الآخر.
raya
Barrick Gold's proposal to take full control of its Acacia Mining Plc unit to resolve a long-standing tax dispute with Tanzania has drawn the ire of Acacia's minority shareholders, who may have the ultimate vote on a deal.
Barrick's offer values Acacia at $787-million, a near 11% discount to its Tuesday close and 42% below Barrick's own audited valuation of Acacia's assets in its 2018 annual report.
"Either their auditors are not doing their job properly and they should have taken an impairment at the 2018 year end, or this is a false statement. Which is it?” an Acacia shareholder, speaking on condition of anonymity, told Reuters.
Barrick spun off Acacia into a separate company in 2010, but owns 63.9% of the company.
Barrick's offer follows two years of wrangling over a $190-billion Tanzanian tax bill, which has since been reduced to $300-million.
Even as Barrick has negotiated with the Tanzanian government to resolve the tax dispute on Acacia's behalf, relations between the two companies have soured. Acacia has blamed Barrick for being shut out of the talks, while Barrick has accused Acacia of failing to cooperate with its efforts.
Following Barrick's offer on Tuesday, Acacia said in a statement the government of Tanzania had refused to execute final agreements if Acacia is one of the counterparties.
Under UK rules, an offer for more than 30% of a company's shares requires approval by at least 50% of shareholders unrelated to the deal. But that requirement may be waived if over 50% of the target is held by one shareholder. Barrick did not respond to requests for comment on the matter.
One Barrick shareholder, speaking on condition of anonymity, said Acacia's minority shareholders appeared to have few other options than to accept the offer.
"Take this deal or the company goes on being harassed by the Tanzanian government," the investor said, noting Acacia's minority shareholders may have a little leverage since Barrick "can't do anything with the status quo either . . . Barrick can't sell to a third party, because nobody's going to buy Acacia without an agreement in place."
Shares of Acacia, which owns three mines in north-west Tanzania, opened down 8.4% in London but recovered to close 3% lower at 154.9 pence.
Barrick shares closed 1.5% lower at C$16.01 in Toronto, broadly in line with the S&P/TSX Global Gold Index.
With much of the tax dispute stemming from the period when Barrick fully owned the Acacia assets, a deal by Barrick with the government of Tanzania to retake ownership "feels like bare-faced cheek to us," analysts at Peel Hunt wrote in a note.
Acacia's troubles in Tanzania began after President John Magufuli, nicknamed "The Bulldozer," swept to power in 2015 pledging to secure a bigger share of resource wealth and cut corruption.
The Tanzanian government accused the company of evading taxes for years by under-declaring exports, a claim Acacia has dismissed.
In February, weeks after Mark Bristow, known as a seasoned African operator, became chief executive of Barrick, the company outlined details of a deal with the Tanzanian government to settle the Acacia dispute, including a $300-million payment and a 50:50 split of economic benefits.
The news sent Acacia shares surging to their highest since October 2017, when an initial framework deal was announced, but they have since declined 42%, as a final agreement failed to materialize.
Barrick has offered 0.153 of its own share for each Acacia share, which implies a total consideration of $285-million to the minority shareholders of Acacia.
Barrick has until June 18 to make a firm offer for Acacia or walk away from the deal.
https://www.miningweekly.com/article/barricks-buyout-offer-for-acacia-unit-irks-minority-shareholders-2019-05-23
Investors tracking shares of Platinum Group Metals Ltd. (PLG) may be focusing on where the stock is trading relative to its 52-week high and low. At the time of writing, the stock had recently reached at $1.31. At this price, shares can be seen trading -39.63% off of the 52-week high mark and 57.09% away from the 52-week low. Investors often pay increased attention to a stock when it is nearing either mark. The Price Range 52 Weeks is one of the tools that investors use to determine the lowest and highest price at which a stock has traded in the previous 52 weeks. It has a market cap of $43.86M.
Volume Evaluation
Active moving action has been spotted in Platinum Group Metals Ltd. (PLG) on Tuesday as stock is moving on change of 3.98% from the open. The US listed company saw a recent price trade of $1.31 and 39533 shares have traded hands in the session. There are 127.6K shares which are traded as an average over the last three months period.
Trading volume can help an investor identify momentum in a stock and confirm a trend. If trading volume increases, prices generally move in the same direction. That is, if a security is continuing higher in an uptrend, the volume of the security should also increase and vice versa. Trading volume can also signal when an investor should take profits and sell a security due to low activity. If there is no relationship between the trading volume and the price of a security, this signals weakness in the current trend and a possible reversal.
Performance Levels
Looking performance record on shares of Platinum Group Metals Ltd. (PLG) we observed that the stock has seen a move 1.09% over the last 52-week trading period. The stock generated performance of -13.81% tracking last 3 months and -25.31% over the recent 6 months. Investors will be anxiously watching to see if things will turn around and the stock will start gaining or losing momentum over the next few months. If we look back year-to-date, the stock has performed -12.07%. Shares are at -5.07% over the previous week and -7.09% over the past month.
Analyst Views: Fluctuating the focus to what the Wall Street analysts are projecting, we can see that the current consensus target price on shares is $6.96. Analysts often put in a lot of work to study stocks that they cover. Wall Street analysts have a consensus recommendation of 2 on this stock. This number falls on a one to five scale where a 1 would be considered a strong buy and 5 means a strong sell, 2 shows Buy, 3 Hold, 4 reveals Sell recommendation.
Volatility Insights
Watching some historical volatility numbers on shares of Platinum Group Metals Ltd. (PLG) we can see that the 30 days volatility is presently 4.92%. The 7 days volatility is 3.79%. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period.
The company has a beta of 1.93. 1.00 indicates that its price is correlated with the market. Less than 1.00 shows less volatility than the market. Beta greater than 1.00 indicates that the security’s price is theoretically more volatile than the market.
The Average True Range (ATR) value reported at 0.07. The average true range (ATR) is a technical analysis indicator that measures volatility by decomposing the entire range of an asset price for that period. A stock experiencing a high level of volatility has a higher ATR, and a low volatility stock has a lower ATR. The ATR may be used by market technicians to enter and exit trades, and it is a useful tool to add to a trading system. It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations. The indicator does not indicate the price direction; rather it is used primarily to measure volatility caused by gaps and limit up or down moves. The ATR is fairly simple to calculate and only needs historical price data.
Technical Considerations
Platinum Group Metals Ltd. (PLG) stock positioned -14.19% distance from the 200-day MA and stock price situated -21.70% away from the 50-day MA while located -7.08% off of the 20-day MA. Platinum Group Metals Ltd. (PLG) traded moved -39.63% from the 50-day high price and spotted a change of 3.98% from the 50-day low point.
RSI value sited with reading of 37.5. The Relative Strength Index (RSI) is one of the most popular technical indicators that can help you determine overbought and oversold price levels as well as generate buy and sell signals. RSI Indicator has proven to be quite useful for traders and investors. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30.
Chinese alumina prices have jumped to a five-month high on news that at least two refineries in the province of Shanxi are being shut down pending environmental inspections.
So far the market impact seems localised.
Shanghai aluminium prices have risen on concerns about the potential knock-on effect on metal production in China. Alumina is the intermediate product derived from bauxite used to smelt aluminium.
But the price of alumina traded on the CME is unmoved, reflecting expectations that the giant Alunorte alumina refinery in Brazil is poised to receive official sign-off to return to full production after more than a year of operating at half capacity.
What links both the Alunorte outage and the latest events in China is aluminium’s dirty secret.
The metal touted for its environmental benefits, particularly in the manufacture of lighter cars and trucks, has a big problem with storing its toxic by-products.
With the world’s focus on tailings dams after the Brumadinho iron ore disaster in Brazil, aluminium has just received another reminder that it, too, has a tailings problem.
Most of the world’s refineries use the Bayer process to extract alumina from bauxite.
The waste product is red mud, a mix of un-dissolved alumina, iron oxide, silicon oxide, titanium oxide and multiple other metals in smaller quantities. It’s the iron oxide that gives the residue its distinctive red colour.
The most common way of dealing with red mud is storing it in tailings dams or ponds.
And there’s a lot of it around; more than 3 billion tonnes, according to the International Aluminium Institute (IAI), which describes red mud as “one of the largest industrial by-products in modern society”. (“Bauxite residue management: Best Practice”, July 2015).
A tonne of alumina on average generates about one-and-a-half tonnes of red mud, though the ratio varies depending on the type of bauxite processed.
Last year there were 160 million tonnes of residue produced. And as global alumina and aluminium capacity rises, the amount of residue will also rise to a forecast 250 million tonnes in 2030.
Red mud briefly grabbed the headlines in 2010, when a dam spill at the Ajka refinery in Hungary flooded the surrounding area, killing 10 people and leaving many more with caustic burns from the highly alkaline waste material. The plant was closed permanently.
And it’s red mud that roiled the alumina market last year and threatens to do so again.
The partial closure of the Alunorte refinery, the largest alumina plant in the world with annual capacity of 6.3 million tonnes, was down to concerns that red mud had spilled from a containment pond after heavy rain.
Hydro, the plant’s owner and operator, has consistently rejected those concerns and the authorities are slowly moving towards allowing a resumption of normal operations.
A Brazilian court has lifted one of two production embargoes on Alunorte, leaving the company hopeful that the second will be revoked imminently.
There may be an issue with getting approval for a new containment pond, but Alunorte still has 8-18 months of capacity in its existing residue disposal area.
Red mud is also what prompted the Chinese authorities to order the closure of Xinfa Group’s Jiaokou alumina refinery in Shanxi.
China’s state-run CCTV last week reported that the refinery, which has annual capacity of 2.8 million tonnes, had been dumping red mud in Xiaoyi city, contaminating the local river system and crops.
Environmental inspectors are due to inspect the plant and its tailing ponds, with the Ministry of Ecology and Environment (MEE) issuing a directive for other refineries to be checked.
At least one other local plant, operated by Huaqing Aluminium, has also been closed.
The full extent of the curtailments and their duration remains uncertain, meaning it is difficult to assess whether there will an impact on Chinese aluminium production.
However, the jump in the Chinese alumina price and rising Shanghai aluminium prices suggest there is genuine concern about potential supply-chain disruption.
Just to underline how much of a global issue red mud has become was the temporary closure last month of Hindalco’s Muri refinery in the Indian state of Jharkhand after what the company termed “an incident in the red mud (bauxite residue) storage area”.
There is plenty of ongoing research into finding a commercial use for red mud, with several producers working on either extracting other minerals or at least rendering it less harmful.
Rusal, which has been working on the problem for several years, announced in April a memorandum of understanding with Tiocomposite, a company operating under the auspices of the Nanotechnology Centre of the Republic of Tartarstan, to convert red mud to sulphur concrete.
Sulphur concrete is “an innovative construction material that can be used to produce pavement slabs, kerb stones, drain channel trays, gravel and other materials necessary for the implementation of infrastructural projects”, Rusal says.
The two companies will operate a pilot plant to process about 100,000 tonnes a year of dehydrated mud.
It would be an innovative solution to a growing problem for the global aluminium industry.
Without some form of technological breakthrough red mud will simply carry on accumulating in tailings dams and ponds with all the accompanying risks of seepage, contamination and possibly worse.
“Look out - we’re on the radar,” warned Ron Knapp, secretary general of the IAI, speaking at last month’s CRU aluminium conference in London.
“You don’t have to be in the iron ore business, you just need a dam,” he added, referring to what it takes to attract investor and regulatory scrutiny these days.
The IAI has published papers on both sustainable bauxite mining and bauxite residue management in an effort to standardise and improve the industry’s storage of red mud.
The institute’s message is that even shiny recyclable aluminium “must justify its use of global resources”.
To judge by the latest red mud scare in China, the sector’s required clean-up is still very much a work in progress.
Chinese manufacturers that produce copper rods with copper scrap as feedstock operated at a sharply lower level last month as orders shrank after copper scrap lost its price advantage on firm invoice costs and weak copper prices.
An SMM survey showed that operating rates across scrap-using copper rod producers in China averaged 66.98% in April, down 4.27 percentage points from March and 7.12 percentage points from April 2018.
A limited decline in the rate at which copper scrap consumers in China purchase value-added tax invoices for tax-excluded copper scrap after the VAT cut took effect from April 1, as well as weak copper prices narrowed the price discount of copper scrap against copper cathode from a peak of 1,500 yuan/mt to 1,200 yuan/mt.
The copper scrap spread was at around 1,000 yuan/mt for much of April, down 400 yuan/mt from the previous month, lowering the appeal of copper scrap and reduced orders for scrap-using copper rods.
Copper scrap supplies also substantially declined as traders held back from offloading cargoes in a sluggish market.
The appeal of copper scrap further weakened in May, with the discount against copper cathode falling to 600 yuan/mt as of May 17, as a flare-up in US-China trade tensions dragged down copper prices by some 1,000 yuan/mt.
This further kept copper scrap traders from selling. Tighter supplies kept prices high, and drove up costs across copper rod producers. Losses have driven most producers to cut production, even as a tiny few are maintaining normal production to avoid losing clients.
The average operating rate across scrap-using copper rod producers is expected to fall 5.36 percentage points month on month to 61.63% in May, standing 10.28 percentage points lower than the same period last year.
The rate across firms that produce copper rod with copper cathode as feedstock, however, is likely to significantly rebound in May, posting the first year-on-year increase in 2019, of close to 2 percentage points.
The Chinese government’s tighter grips over waste imports will sustain tightness in copper scrap supply. This, together with limited steam in copper prices, is set to prevent copper scrap spreads from widening. Consumption of copper cathode will receive a further boost from the weaker appeal of copper scrap.
Zambian President Edgar Lungu threatened to “divorce” the domestic copper units of Vedanta Resources and Glencore after the companies said they’d curb operations in the Southern African nation.
The threat marks an escalation in tensions between the mining industry in Africa’s second-biggest copper producer and the state, after an increase in royalties and plans to introduce new taxes. Last week, Mines Minister Richard Musukwa said the government directed Glencore’s Mopani Copper Mines to hand over two shafts to local contractors rather than close them.
Zambia’s kwacha extended its losses against the dollar to as much as 3.2% to the lowest level since 2015, and was down 2.3% at 13.91 per dollar by 16:00 in Lusaka, the capital. Yields on the country’s $1-billion of Eurobonds due April 2024 rose 11 basis points to a record 18.25% after the Lungu’s statement.
Lungu visited Copperbelt province Friday to meet officials from labor unions and the Chamber of Mines, the main industry lobby group, after Mopani announced last week it plans to shut two shafts and fire hundreds of workers. The disagreement could weaken the kwacha, which is already the world’s second-worst performing currency against the dollar this year, having fallen 14.7%.
INVESTOR INTEREST
“I want to make it very clear that I have come here to sanction, if it’s the will of the Zambian people, that we divorce these mines,” he said in a speech broadcast live on Facebook as the crowd responded with cheers. “My position is that enough is enough. The attorney general is here, the lawyers are here. They will guide us how to proceed with this divorce.”
Amos Chanda, a spokesperson for the President, said that by using the word “divorce,” Lungu was referring to the fact that other unidentified investors are interested in Zambian mining assets.
“Everything that will be done will be done within the confines of the law, in line with the existing mining licenses,” Chanda said. “It is not in the policy of the Zambian government under any circumstances to engage in nationalization or seizure of private assets without due process.”
Vedanta’s Konkola Copper Mines noted Lungu’s concerns and said it’s committed to its operations in the country.
“We believe there is an opportunity to resolve these matters for the benefit of all stakeholders,” Eugene Chungu, a company spokesperson, said by phone. “Certainly, we are committed to investing in the country for the long haul.”
A Mopani spokesperson requested emailed questions when called for comment, which the company didn’t immediately respond to.
Lungu accused mining companies of lying about their profit, and trying to arm-twist the government over its plans to replace value-added tax with a new sales tax system.
“We know they are liars, they are cheats and they take us for fools,” he said. “Let me conclude by saying that sales tax is here to stay. We are not going to be blackmailed by the investors, no. Those who are uncomfortable to stay in our house can go out.”
China’s pig herd fell at faster pace in April – agriculture ministry
China's hog inventories declined at a faster pace in April due to African swine fever outbreaks. Analysts believe the impacts of the disease will last for quite a while and pork imports are not enough to fill the gap in pork supplies this year.
China's pig herd and the number of breeding pigs fell by 20.8 per cent and 22.3 per cent in April from a year earlier, falling at a double-digit rate for a fourth consecutive month, said the Ministry of Agriculture and Rural Affairs on Wednesday. The declines accelerated from 18.8 per . . .
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https://www.yuantalks.com/chinas-pig-herd-fell-at-faster-pace-in-april-agricultur
The London Metal Exchange (LME) nickel market was last week gripped by the most acute tightness in a decade.
Time-spreads flexed into backwardation as a long-running downtrend in exchange stocks squeezed short position holders.
Falling inventory and tighter spreads are normally strong bull signals in a commodity market.
And in nickel’s case they seem to tally nicely with the International Nickel Study Group’s (INSG) forecast that supply will fall short of usage for the fourth successive year in 2019.
However, conspicuous by its absence is any strength in the outright nickel price, which has fallen from a March high of $13,765 per tonne to a current $11,910.
Nickel has been caught up in the broader base metals negativity caused by slowing global manufacturing activity and U.S.-China trade tensions. Chinese players also appear to have stopped buying nickel as a derivative of the rampant iron ore price.
But nickel’s own dynamics are also looking increasingly muted as analysts worry about a coming soft patch in demand even as production surges.
Falling stocks, tightening spreads and a sliding price herald a period of confusing signals in the London market.
A TASTE OF THINGS TO COME?
The LME benchmark cash-to-three-months spread CMNI0-3 flipped from a relaxed $38 per tonne contango on Friday, May 13 to a backwardation of $20 at Thursday’s close.
The pressure was concentrated on the June-July spread, which ended Thursday valued at $50 backwardation, a level of tightness not seen on a front-month nickel spread in a decade, according to LME broker Marex Spectron.
This times-spread tightness seems to have been down to a localised concentration of big positions on the LME’s June prompt date, particularly a dominant long holding between 20 and 30 percent of open interest.
It seems to be something of a flash squeeze. There was a marked alleviation on Friday, the cash-to-three-months spread closing at a contango of $11 per tonne and June-July this morning trading at just $25 backwardation.
But it’s the second nickel spreads blow-out this year after January’s brief but vicious cash-date squeeze.
And more such episodes seem inevitable, if LME stocks extend their long-running downtrend.
Registered exchange inventory has fallen from a multi-year high of 470,000 tonnes in June 2015 to 164,100 tonnes.
Moreover, a significant 37% of what’s sitting in LME warehouses is earmarked for physical load-out.
Open tonnage, meaning the amount of stock available for physical settlement of LME positions, stands at just 103,344 tonnes.
A shrinking physical liquidity base is going to leave LME spreads vulnerable to the next big positional clash lying along the nickel curve.
DEFICIT MARKET
Sliding LME stocks appear to dovetail with the INSG’s assessment of underlying market dynamics.
The group is forecasting a supply-demand deficit of 84,000 tonnes this year, lower than 146,000 tonnes last year but the fourth successive year of shortfall.
However, the linkage might be deceptively neat.
Some of the metal leaving LME warehouses may well have gone to meet end-user demand but there is a robust analysts’ consensus that some of it has simply been moved to statistically opaque off-market storage.
This is part of a broader trend playing out on the London exchange, which has seen the evolution of a “shadow” warehousing system as metal-holders look for cheaper non-LME storage.
The common theme is one of time-spread volatility but a lessening of any LME stocks price signal.
Moreover, the INSG’s figures suggest that production growth is now outpacing consumption growth leading to a smaller expected shortfall in 2019.
Resurgent mine production in Indonesia, up 71% last year, is driving strong nickel pig iron (NPI) production.
China’s NPI output rose by 12% in the first quarter of 2019 with total primary production also up by 12% at 175,000 tonnes, according to Helen Lau, metals and mining analyst at Argonaut Securities in Hong Kong.
The demand outlook, by contrast, is starting to look cloudier.
ALL ABOUT STAINLESS
Despite all the bullish hopes pinned on future nickel usage in electric vehicles, the current reality is that demand remains defined by nickel’s usage in stainless steel production.
Global stainless steel production rose by 5.5% last year and is expected to continue to grow in 2019, according to the INSG.
Within the stainless sector, nickel has been benefiting from a shift towards higher quality, higher nickel-content grades.
But analysts are bracing for a slowdown in China’s stainless production run-rate, which given China’s scale of production means a slowdown in global run-rates.
Stainless steel margins in China have deteriorated on falling prices, while stocks are at record high levels, according to researchers at Goldman Sachs. (“China Metal Bullets: Caught between macro and micro”, May 15, 2019).
“Industry participants expect stainless steel mills to cut production in Q2, implying falling nickel demand,” the bank said in a note.
Analysts at Citi agree, suggesting “we may see a stainless production cut in May”, adding that outside of China demand “appears fairly soft”. (“Metals Weekly”, May 13, 2019).
This collective sense of coming weakness in China’s giant stainless steel sector, the single biggest end-user of nickel, is also why the LME nickel price has been drifting.
Nickel bulls are facing a bear combination of macro negativity and micro sogginess.
SIGNALS CLASH
Last week’s spreads gyrations briefly halted that drift in price but nickel is once again on the back foot, struggling to hold the $12,000 level on Monday.
Stocks, meanwhile, continue their downwards march to the tune of another net 300-tonne fall.
This divergence in price and stocks trends is generating a bear-bull signals clash, accentuated by last week’s sudden flip into time-spread backwardation.
Aluminium traders have gotten used to such signals confusion, a bombed-out aluminium price clashing with seemingly low stocks and rolling periods of cash tightness on the London market.
It looks as if nickel traders are going to have to get used to it as well.
Zinc prices hit four-month lows on Monday as investors fretted about rising supplies from top producer China, while industrial metals overall came under pressure from trade tensions between the United States and China.
Benchmark zinc on the London Metal Exchange traded down 1.7% at $2,555.50 a tonne in official rings. Earlier, prices of the metal used to galvanise steel touched $2,553, its lowest since Jan. 22. It is down more than 9% in May.
“There was another wave of selling this morning. The idea of much higher zinc supplies in China in the second half has hit sentiment,” a zinc trader said.
“It looks like there isn’t going to be a resolution to the trade dispute any time soon, that uncertainty will keep up pressure on the base complex.”
Analysts expect China’s zinc production to climb around 5% in May from April to above 560,000 tonnes. Higher numbers are expected in the second half as new capacity ramps up.
A Reuters survey published earlier in May shows analysts on average expect a surplus of 20,000 tonnes this year after years of deficits, in a market estimated around 14 million tonnes.
POSITIONS: “Speculative positioning in zinc as of last Thursday shifted from flat to a net short of 2.1% of open interest or 3,300 lots (82,500 tonnes),” Marex Spectron analysts said in a note. “Whilst relatively small, this is a level not seen since Dec. 2018”.
STOCKS: However, low stocks of zinc in LME-approved warehouses, at 104,850 tonnes from above 250,000 tonnes in August last year, and large holdings of LME warrants are fuelling nervousness about shortages on the LME market. MZNSTX-TOTAL <0#LME-WHL>
This can be seen in the premium or backwardation for the cash over the three-month contract which ended at a 20-year high $150.50 a tonne on Friday. MZN0-3
SolGold is in talks with financiers keen to invest in its Ecuadorian copper-gold prospects and mining major BHP could increase its stake in the company, SolGold’s chief executive said on Monday.
In a preliminary economic assessment of the Alpala copper-silver-gold deposit in northern Ecuador released earlier, London-listed SolGold said annual copper output should be 207,000 tonnes for the first 25 years of a mine life of roughly half a century.
Ecuador has attracted a flurry of interest from big miners eager to increase their exposure to copper. The highly conductive metal is in demand for use in renewable energy and electric vehicles, but big, new deposits are rare.
Diversified majors particularly favour such large-scale, long-life projects as SolGold promises.
CEO Nick Mather said the next steps included permit discussions with the Ecuadorian government and talks with potential investors.
He declined in a telephone interview to name the parties involved but said SolGold was open to all sorts of financing structures.
He said that BHP, SolGold’s second biggest shareholder, has room to increase its stake.
BHP declined to comment, but Refinitiv data shows it has just over 205 million shares in SolGold, below a threshold of a little more than 246 million set by an agreement last year, when BHP said it would not go beyond that without SolGold consent.
MORE PROMISING ASSETS
Australia’s Newcrest Mining is SolGold’s biggest investor with 15.3%, while BHP has 11.2%.
“This is a company that is attracting people who have a bullish outlook for the copper market,” Mather said.
A definitive feasibility study is expected by the end of 2020 and a development decision should be taken around the same time on Alpala, the most advanced SolGold prospect, which is in Ecuador’s Cascabel region.
Other assets in SolGold’s Ecuadorian portfolio could be even more promising, Mather said.
BHP, which gets the biggest share of its earnings from iron ore, has also increased its Ecuador exposure with an outline deal with Canada’s Luminex Resources, which has gold-copper prospects.
Copper constitutes the second biggest share of BHP’s earnings and it has an operating stake in the world’s biggest copper mine Escondida in Chile. Escondida produces more than 1 million tonnes annually, although production fell in the first quarter.
While the outlook for iron ore is clouded by uncertainties over Chinese consumption and trade, copper is expected to see strong demand on rising levels of electrification and as the world shifts toward renewable power.
As the most obvious copper deposits become depleted, Ecuador appeals because the government is considered investor-friendly when some resource-holding nations are imposing increasingly tough terms.
Norwegian metals maker Norsk Hydro has been given the go ahead by a Brazilian federal court to resume full output from the company’s Alunorte alumina refinery, it said on Monday.
The plant, a key supplier to the aluminium industry, currently operates at half of its capacity after a spill in February 2018 that prompted regulators and courts to restrict output.
A restart of Alunorte will bring a significant near-term profit boost for Norsk Hydro, the company’s chief executive Hilde Merete Aasheim said this month.
The refinery is the world’s largest, transforming bauxite from mines in Brazil into alumina, the key material used for making aluminium at smelters owned by Hydro and others around the world.
“Production at Hydro’s Paragominas bauxite mine will be increased in line with the ramp-up speed at Alunorte. A decision to also increase production at Hydro’s part-owned Albras primary aluminium plant is expected shortly,” Hydro said on Monday.
The Albras smelter, owned 51 percent by Hydro and 49 percent by Nippon Amazon Aluminium, has annual capacity of 460,000 tonnes of finished metal but has operated at half capacity because of reduced raw material supply.
The federal court’s decision to lift the Alunorte embargo followed a hearing last month.
The plant could reach 75-85% utilisation within two months, with a further increase after that, the company added.
Since the emission of untreated water during severe rains in February last year, Hydro has upgraded Alunorte’s facilities to help to convince authorities to allow it to resume full output.
A technical assessment by a third-party consultancy last month backed the conclusion that the plant was safe, leading Hydro and the prosecutor to propose on April 12 that the court should lift its embargo.
Alunorte has annual production capacity of 6.3 million tonnes of aluminium oxide, or alumina, while global output of the white, powdery substance is close to 100 million tonnes a year, Norsk Hydro says on its website.
In addition to the output restriction, Hydro is still awaiting a court ruling on whether it will be allowed to use a new bauxite residue disposal area, known as DRS2.
In the meantime, the company’s existing DRS1 waste facility is filling up and has an estimated remaining lifetime of 8-18 months, though the company is working on plans to extend that, Hydro said last week.
Trade in Hydro’s shares closed before Monday’s announcement. The stock has fallen by 15% so far this year.
After Tesla’s stock slumped to its lowest level since December 2016 on the back of bearish analyst coverage on Monday, Morgan Stanley chimed in on Tuesday, slashing its ‘worst-case’ Tesla share price target to just US$10 from US$97 in case the U.S.-China trade war hits the EV maker and dampens significantly demand for its cars on the Chinese market.
According to Morgan Stanley analyst Adam Jonas, the key drivers for the ‘bear case’ downgrade are a worst-case outcome of the trade war and rising debts at Tesla.
According to Jonas, Tesla’s sales in China could generate as much as US$9 billion between 2020 and 2024, but if China were to hit Tesla with tariffs and restrictions amid an all-out trade war with the U.S., Tesla’s potential Chinese sales could fall to half that figure, which could erase US$16.4 billion of Tesla’ market capitalization.
“Our revised case assumes Tesla misses our current Chinese volume forecast by roughly half, to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention,” Jonas said in a note, as carried by The Street.
After disappointing deliveries and a big loss in the first quarter of this year, Elon Musk suggested that “There is some merit to raising capital.”
A week later, Tesla raised more than US$2.3 billion through offering common stock and convertible bonds in a move that analysts described as “net positive” and probably long overdue.
Yet, some analysts continue to believe that Tesla needs more capital injections on top of the funds it raised earlier this month in order to stay afloat.
Related: Why China Hasn’t Slapped Tariffs On U.S. Oil Imports
According to Morgan Stanley’s note, as carried by Reuters:
“We believe as Tesla’s share price declines, the likelihood of the company potentially seeking alternatives from strategic/industrial/financial partners rises.”
While Morgan Stanley’s Jonas slashed the ‘bear-case’ price target for Tesla, he left unchanged the base-case target on Tesla’s stock at US$230, while the bull-case price target is US$391.
Tesla’s (NASDAQ: TSLA) shares were down more than 2 percent in pre-market trade on Tuesday, after they hit on Monday the lowest since December 2016 at US$205, after Wedbush Securities cut their share price target to US$230 from US$275.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
The indigenous community of Fuerabamba in Peru decided to impose a new road blockade on MMG Ltd’s Las Bambas copper mine after talks with the company over compensation broke down, a representative of the ombudsman’s office said on Tuesday.
The community planned to start the blockade at midnight (0500 GMT) on Tuesday, the representative, Americo Contreras, said by phone, citing a document from government officials who mediated the talks that ended without a solution late on Monday.
Fuerabamba had blocked MMG from transporting Las Bambas’ copper concentrates on a road on its farmland for more than two months earlier this year.
Representatives for Fuerabamba and Las Bambas could not immediately be reached for comment to confirm the new blockade was in place.
Global miner BHP Group on Wednesday said it plans to expand its nickel sulphide operations amid an expected boom in demand for the material in electric vehicle batteries.
But the company is not looking to produce main battery ingredient lithium as it sees such output having slimmer profits.
Speaking at a strategy briefing on long-term asset allocation, BHP Chief Financial Officer Peter Beaven said growth in nickel could come from either exploration or acquisitions.
“We are interested in adding more nickel sulphide resources to our portfolio, so we should continue to add exploration options in these areas,” he said.
“We do not need to do M&A, but we never discount it as a way to acquire great resource bases.”
The world’s biggest miner earlier this month said it had decided to hold on to its Nickel West operations in the state of Western Australia, which it had previously put up for sale.
Nickel is in demand to allow electric cars to travel further on a single charge. Using more nickel also cuts costs by reducing the use of expensive cobalt, a mainstay of current EV batteries.
Miners of nickel sulphide in Western Australia that could feed BHP’s operations, as well as being potential takeover targets, include Western Areas Ltd, Independence Group, Panoramic Resources, Mincor and Cassini Resources Ltd.
However, Vice President of Strategy Paul Perry said BHP was not looking to move into lithium, expecting profits in that sector to be hit as more supply comes online in the wake of cheaper production techniques.
“The available economic profit ... in that industry for the next couple of decades really isn’t there,” he said.
BHP’s battery strategy marks a contrast to rival Rio Tinto, which has a huge but still undeveloped lithium deposit, Jadar, in Serbia.
Beaven also said that BHP needed more options for growth in copper and oil, but was unlikely to add significant new capacity in iron ore or metallurgical coal beyond increases that come from improved productivity.
Aurubis, Europe’s biggest copper smelter, said on Wednesday it had agreed to buy Belgian-Spanish recycling company Metallo Group for 380 million euros ($424 million) as part of an acquisition-led shift into other metals.
“Due to megatrends such as smart homes, e-mobility, digitalization and renewable energies, both the quantity and the complexity of secondary raw materials will increase significantly,” Aurubis Chief Executive Juergen Schachler said.
Metallo, which is being sold by funds managed by investment firm TowerBrook Capital Partners, specialises in recycling difficult materials with low metal content and has attractive growth potential, Aurubis said.
With around 530 employees at its main sites in Belgium and Spain, Metallo generated revenues of about 985 million euros in fiscal year 2018, the German company added.
Aurubis completed its purchase of the remaining shares in copper wire and rod maker Deutsche Giessdraht last July and Schachler said in February it was still seeking acquisitions.
Schachler, who leaves Aurubis at the end of June, has begun an expansion into other metals alongside copper and Metallo’s recycling includes nickel, tin, zinc and lead as well as copper.
Metallo processes about 220,000 tonnes of scrap and recycling materials annually at its plant in Beerse in Belgium and another 95,000 tonnes is processed at its plant in Berango in Spain, Aurubis said in a presentation on a conference call.
The tonnage of new metals produced by Metallo is not being revealed.
“Metallo’s processing expertise and specific metallurgical know-how provide an excellent complement to Aurubis’ own strengths,” Schachler said.
Aurubis said the closing of the deal was subject to clearance by merger control authorities including the European Union, and was expected towards the end of 2019.
The company added it was confident of getting regulatory approval. The EU in February blocked Aurubis’ plan to sell its flat rolled products business to a German producer.
BNP Paribas acted as adviser to Aurubis on the Metallo deal.
Qinghai-based aluminium producer Western Hydropower will resume 50,000 mt of primary aluminium capacity by the end of May, a source told SMM on Wednesday May 22.
The company previously closed its 150,000 mt of primary aluminium capacity. The remaining 100,000 mt under suspension will also come online in the months ahead.
SMM learned that the plant started to pay a lower electricity price of 0.3 yuan/mt from May.
Codelco’s giant Chuquicamata mine is set for a 40% drop in production over the next two years, an internal forecast seen by Reuters shows, pointing to the sharp challenge facing the world’s top copper miner as it scrambles to maintain output.
The giant open-pit mine, set to be the Chilean state-run miner’s biggest by output this year, is undergoing a complex $5 billion-plus transformation into an underground shaft mine in a bid to extend the century-old prospect’s lifespan.
Chile’s President Sebastian Pinera is expected to formally cut the ribbon on the revamped copper mine, often referred to as ‘Chuqui’, in coming months.
This year, ores from the new project will be added to the existing open-pit operations, giving Chuqui overall production of 459,000 tonnes - its highest since 2010 - the previously unreported 2019 forecast shows.
But as Codelco scales down and ultimately shutters open pit extraction next year, while the underground project still ramps up, output will drop sharply, the figures show - down 182,000 tonnes by 2021 versus 2019.
That will drive overall Codelco production down 4% by 2021, according to the long-term business development plan. That would be steeper were it not for a planned production hike at the miner’s Radomiro Tomic prospect.
Codelco declined to comment on the forecast data, saying the numbers were confidential.
The changes at Chuqui underscore the risk to Codelco’s global dominance amid a $39 billion overhaul of its key operations to try and counteract rapidly falling ore grades that are hitting top copper exporter Chile more broadly.
“We’re going to see a lengthy process to bring production to a level similar to that of the pit,” said Juan Carlos Guajardo, head of consultancy Plusmining. The above-ground ‘pit’ is the size of over 3,000 American football fields.
Guajardo projected a seven-year “ramp up” period. The internal presentation seen by Reuters shows production at Chuqui dropping sharply to 277,000 tonnes by 2021 before climbing back to a peak of 416,000 tonnes in 2024.
“SCISSOR HANDS”
Chuqui is also facing a battle with simmering worker tensions and technical delays, hampering prospects at the mine.
Plans for the underground project were drawn up early in the decade when copper prices were hitting all-time highs, then scaled back by chief executive Nelson Pizarro, known as “scissor-hands” for his focus on costs.
Copper prices are now being hit by a whipsawing trade standoff between the United States and China. They have fallen for five straight weeks and are near several-month lows.
“The challenge remains to ensure future viability, modifying the work culture and applying new work practices and technology,” Pizarro told Reuters in a recent interview, adding Codelco needed to improve productivity without lifting costs.
That could mean pain for Chuqui workers, with some 1,700 expected to lose their jobs in coming years, putting Codelco’s powerful unions on edge.
A January negotiation round on the layoffs ended in an impasse and differences still loom large during an ongoing second round of talks with top unions. Some fear the conflict will provoke strikes, further hitting production.
Unions at Chuqui rejected on Sunday a management proposal for a quick end to contract negotiations.
“The old workers of Chuqui have benefits that are above the rest of the entire company and the cost is immense,” said Gustavo Lagos, a Santiago-based professor at the mining center of the Pontifical Catholic University of Chile.
MUTED START
The first extraction of copper ore from the underground mine, a major milestone for the project, was announced in April via a brief statement, a low-profile start sources at or close to the firm said was due to the tough environment at Chuqui.
An automated conveyor belt system to transport the extracted material to a concentrator plant will only be ready by the last quarter of 2019, according to Pizarro, forcing the firm to use slower trucks to move the ore.
With the lower output at Chuqui, Codelco’s total copper production is expected to fall to 1.66 million tonnes in 2021, from the 1.73 million expected this year, the firm’s internal forecast shows. Only by 2027 would it again top 2019 levels.
The forecast also showed that Codelco’s short-term estimate for the period 2019-2025 had slipped versus its outlook in 2018, though it had raised its longer term production estimate.
Barbara Mattos, an analyst at ratings agency Moody’s, said the overhaul was nonetheless key for Codelco to support its levels of production and ensure “the viability of the company as a relevant actor in the copper industry in the long term.”
https://www.reuters.com/article/us-chile-codelco-chuqui-exclusive-idUSKCN1ST0GV
File Photo: A Fuxing bullet train G1372 pulls out of Guiyangbei Railway Station in Guiyang, capital of southwest China's Guizhou Province, Dec. 28, 2017. (Xinhua/Liu Xu)
SAN FRANCISCO, May 21 (Xinhua) -- China has made a lot of improvement in intellectual property (IP) rights protection thanks to years of governmental and industrial efforts, said a U.S. expert.
"China has improved this IP environment quite a bit," said Mark Cohen, a senior fellow and director of the Asian IP Project of Berkeley Center for Law and Technology at the University of California, Berkeley.
"They improved it even more" since the country started trade talks with the United States, he added.
Cohen made the remarks at a China-U.S. relations seminar on Monday organized by Asia Society Northern California and the Committee of 100, a non-profit U.S. organization of prominent Chinese Americans.
He noted that China now has the biggest number of patent offices around the world, which "in fact is greater than all the other patent offices in the world combined."
"They have great judges. There are a lot of IP faculties and IP newspapers," he told the audience at the event, which was themed "Untangling the U.S.-China Narrative: Technology, Trade, and Tensions."
The expert criticized some Western media for creating sensations about China's IP issues and using the term as "a pretext" to fan up tensions.
As regards the escalating trade tensions between China and the United States, Cohen, who has almost 20 years of involvement in China's IP licensing environment, said he is worried that there is less room to "have honest debate and offer constructive suggestions to both sides."
The two countries, he suggested, should build confidence in order to resume their relations and get themselves back on track.
Zambia’s Chamber of Mines delivered Thursdays further signs of a major global undersupply of copper about to hit the market by announcing that the country’s output of the metal could be as much as 100,000 tonnes lower than last year.
The industry lobby group attributed the expected drop in production to changes to mining taxes introduced in January, which is driving companies to cut output.
“The new tax regime forced miners to do the unthinkable – cut production – because many cannot afford to continue producing as before,” it said in a statement.
Zambia, Africa’s second largest copper producer, churned out 861,946 tonnes of the metal last year. In the first three months of this year, the nation’s copper output fell by 11.3% to 195,244 tonnes, compared to the previous quarter, the Bank of Zambia said earlier this week.
Copper output in Africa’s second largest producer could decline by as much as 100,000 tonnes this year, adding to recent, sharp declines at the world’s main producing nations.
The world’s main copper producing nations have been showing output declines this year, according to the latest monthly bulletin from the International Copper Study Group (ICSG).
Global production declined 2.4% in February 2019, when compared to the same month last year, with 1,515kt (19,749ktpa) of contained copper produced globally.
Chile, the world’s No.1 producer of the metal, led the pack with output down 7.1 % y/y to 415.9kt (5,412ktpa) while Peru, the second main global producer, saw its output fell by 5.1% y/y to 176.1kt (2,296ktpa).
Despite weaker copper production so far this year, ICSG data indicates a small surplus in February of 74kt with refined usage down 14% y/y, totalling 1,758kt (22,917ktpa).
Industry analysts at CRU believe that is undeniable that global demand for copper will soon surpass supply, the world may not need as many new mines as originally forecast.
Over the past year there has been board approval for several high-profile expansions and new projects that are due on-stream over the next five years.
CRU says the coming online of major projects, including Anglo American’s Quellaveco (2022), Teck Resources’ Quebrada Blanca expansion (2021) and First Quantum’s Cobre Panama (already in production) should momentarily eliminate the gap between supply and demand.
The research group now expects 900,000 tonnes a year more mine copper supply by the early 2020s than at this time in 2018.
The EV effect
While the effect on copper demand from the electric vehicles (EVs) sector is expected to be important, the consensus is that it will not meaningfully impact on demand until the second half of the 2020s, CRU says.
The red metal is a key component in the lithium-ion batteries used in EVs, as well as power inverters and in the charging infrastructure needed to keep them running.
Data released by the International Copper Association (ICA), an industry-funded body, shows more than 40 million charging ports will be needed over the next decade, consuming an extra 100,000 tonnes of copper a year by 2027.
All types of EVs require copper. It is used in batteries, windings, rotors, wiring, busbars and charging infrastructure. (SourceResearch commissioned by the International Copper Association (ICA).)
From those stations, at least 3 million will be built in China by 2030, according to the study.
Consumption from the car industry will also weigh on demand, but later. An average gasoline-powered car uses about 20 kg of copper, mainly as wiring. A hybrid needs about 40 kg and a fully electric car has roughly 80 kg of copper (176 pounds).
Copper demand will be substantially impacted by the growing market for electric vehicles (EVs) over the next decade. (SourceResearch commissioned by the International Copper Association (ICA).)
It means that, in the next decade, global copper demand will increase between 3 and 5 million tonnes, experts predict. Once electric vehicles become popular, they estimate demand to reach 11,000,000 tonnes of new copper for EV’s alone.
Copper is also a key element in green technologies and renewables, which despite being adopted at a fast pace, they still represent only a minor percentage of the world’s total energy production.
http://www.mining.com/zambias-just-deepened-worries-sinking-global-copper-output/
Zhng Shiping, who oversaw the rise of China Hongqiao Group into the world’s biggest aluminium producer, died on Thursday at the age of 73, the company said.
Zhang, who in 1994 took over the predecessor company to Hongqiao, a textiles firm in eastern China’s Shandong province, branched out into aluminium in 2002.
As chairman of Hongqiao, he turned the company into an aluminium giant that produced more metal than state-run rival Aluminum Corp of China Ltd, often known as Chalco. In 2015, Hongqiao overtook Russia’s United Company Rusal as the world’s top aluminium producer.
It currently has just under 6.5 million tonnes of smelting capacity, but has found further expansion in China restricted in recent years due to supply-side reform and an environmental protection campaign.
Zhang made an “invaluable contribution to the success of the group during his tenure”, Hongqiao said in a statement to the Hong Kong stock exchange late on Thursday. It did not give a cause of death.
Based in the city of Binzhou, Hongqiao was listed in Hong Kong in 2011, although Zhang still controlled around 70% of its shares, according to Refinitiv Eikon data. Forbes estimates Zhang’s net worth at $4.7 billion, putting him in 484th place in its Billionaires 2019 list.
“(Hongqiao) will convene a board meeting to elect the chairman of the board as soon as possible,” the statement added. Zhang’s son, Zhang Bo, serves as chief executive officer.
Zhang was also a non-executive director of Weiqiao Textile Co Ltd.
The websites of Hongqiao and Weiqiao Textile were reduced to black and white on Friday, the traditional colors of mourning in China.
Troubled British Steel said on Thursday it had secured the backing of lenders and shareholders to continue operating as normal after the prolonged uncertainty around Britain’s departure from the European Union hammered its order book.
Britain’s second largest steelmaker has been in talks with the government, its lenders and shareholders to firm up its finances after customers recoiled from the possible threat of tariffs, damaging long term orders.
The company, which plays a key role in British manufacturing, said on Thursday that it had the backing of key stakeholders including shareholders and lenders, and operations would continue as normal. It thanked the government for its support.
“As the business navigates the significant uncertainties caused by Brexit, and explores options to strengthen the business for the long term, we are pleased to confirm that we have the required liquidity while we work towards a permanent solution,” it said in a statement.
The steelmaker, owned by investment firm Greybull Capital, employs around 5,000 people, mostly in Scunthorpe, in the north of England, while thousands more operate in its supply chain.
Greybull, which specialises in turning around distressed businesses, paid former owners Tata Steel a nominal one pound in 2016 for the loss-making company which they renamed British Steel.
After making a profit in 2017, its first full year of trading since the takeover, it cut around 400 jobs last year, blaming factors such as the weak pound.
A person familiar with the situation said it had asked the government for a loan of around 75 million pounds.
It secured a government loan of around 120 million pounds ($154 million) in May to enable it to comply with the European Union’s Emissions Trading System (ETS) rules.
Since it powered us into the industrial revolution, coal-fired energy has become the single biggest driver of man-made climate change and its use across the world is still increasing.
But while dependence on coal remains high, with coal-fired power plants currently fuelling around 38 per cent of global electricity, a new report indicates the demise of coal is already well underway.
The International Energy Agency’s new world investment report released this week, reveals the companies funding coal-fired power stations appear to be making significant recalculations about the long-term viability of these plants.
This is shown by a collapse in Final Investment Decisions (FIDs) for coal plants, which have tumbled by 75 per cent in three years.
The report says a total of 236 gigawatts of coal plants are under construction worldwide. In 2015, FIDs signed off 88 gigawatts for construction, but this fell to 22 gigawatts in 2018.
Furthermore, the rate at which coal power plants are being decommissioned has risen to the extent that despite new power plants coming online, there was a net reduction in coal power being used globally over 2018. Around 30 gigawatts of generators were retired last year.
It is estimated this could be the first time there has been a reduction in coal-fired power capacity across the world since the industrial revolution.
When the FIDs fall to zero, it will only be a matter of time until coal’s rein is over.
Last year, with FID’s going down, the IEA noted: “It appears that banks, insurance companies, hedge funds, utilities and other operators in advanced economies are exiting the coal business.”
This means that even without policy necessarily directing them, the financial concerns of investors over the future of the fossil fuel business are slowly ensuring money is being allocated to different areas.
Most of the current expansion in coal is in Asia. In the West, the move away from coal has gathered pace, with Europe’s overall use of coal down a quarter, while in the US it has fallen by 40 per cent over the last 10 years.
But these cuts are more than made up for in Asian economies, where over the last decade, the coal-fired power sector has grown by 63 per cent, with more power stations are planned.
The IEA report outlines two scenarios for measuring energy progress.
The first is its Sustainable Development Scenario (SDS). In this scenario, energy production meets the criteria set out under the Paris agreement targets and air pollution around the world is slashed.
The second is the less ambitious New Policies Scenario (NPS), which would see less action taken to tackle fossil fuels and less investment in renewables, resulting in warming reaching around 2.5C by 2100.
While the report’s headline finding is that we are currently on course for disaster due to inadequate levels of investment in low-carbon energy sources, it also makes clear that coal’s unattractiveness has set it on a course to meet the criteria outlined in the more ambitious SDS.
Dr Fatih Birol, the IEA executive director said: “Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies. But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner technologies to change course. Whichever way you look, we are storing up risks for the future.
“Current investment trends show the need for bolder decisions required to make the energy system more sustainable. Government leadership is critical to reduce risks for investors in the emerging sectors that urgently need more capital to get the world on the right track.”
The report comes days after United Nations secretary-general António Guterres said the world must dramatically change the way it fuels factories, vehicles and homes to limit future warming.
The alternative “would mean a catastrophic situation for the whole world,” he told The Associated Press.
Mr Guterres said he will call on leaders to stop subsidising fossil fuels, and wants countries to build no new coal power plants after 2020.
Workers attend the launching ceremony of the TAPI project construction work near the town of Serhetabat, Turkmenistan, February 23, 2018. Photo: Reuters/Marat Gurt
ASHGABAT: A delegation led by Special Assistant to Prime Minister Imran on Petroleum Nadeem Babar departed for Ashgabat, Turkmenistan on Sunday to participate in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline meeting.
Groundbreaking of the TAPI gas pipeline will be held in Pakistan in October, according to sources. The Pakistani delegation is travelling to Turkmenistan to finalise the plans for the groundbreaking of the project.
The TAPI gas pipeline project is expected to be completed by 2022 in Pakistan. Once completed; Pakistan is expected to receive 1.320 billion cubic meters (bcm) of natural gas.
The TAPI project, supported by the United States and the Asian Development Bank (ADB), has been touted by Turkmenistan since the 1990s. But the start of work was delayed because of the problem of crossing Afghanistan.
The ADB is acting as the facilitator and coordinator for the project. It is proposed to lay a 56-inch diameter 1,680 KM pipeline with design capacity of 3.2 billion cubic feet of natural gas per annum (Bcfd) from Turkmenistan through Afghanistan and Pakistan up to Pak-India border.
The pipeline will run for hundreds of kilometers (miles) through areas of southern Afghanistan largely controlled by Taliban fighting the Western-backed government in Kabul but the movement has signaled that it will not hinder the project.
Ex-Soviet Turkmenistan holds the world’s fourth-largest natural gas reserves but has been heavily dependent on gas exports to China after Russia cut back gas imports in the past few years.
The project is expected to transport 33 billion cubic meters (bcm) of natural gas a year along an 1,800 kilometer route from Galkynysh, the world’s second-biggest gas field, to Fazilka near the border with Pakistan in northern India.
Afghanistan, which suffers from chronic energy shortages, is expected to take five billion cubic meters of gas itself, with the rest divided equally between Pakistan and India. In addition, Kabul will earn hundreds of millions of dollars in transit fees.
Without clearing Rs206b worth of liabilities, the steel mill may be difficult to revive
ISLAMABAD: The Sindh government has scuppered a plan of the Pakistan Tehreek-e-Insaf (PTI) administration in the centre to revive the financially troubled and closed Pakistan Steel Mills (PSM) by resisting the sale of its land for settling liabilities.
An expert group, formed by the current PTI government and tasked with suggesting ways for reviving PSM, in its report recommended that land assets available with the steel mill could be utilised to settle outstanding liabilities worth Rs206 billion.
It suggested that the land should be sold for industrial purposes which would give a boost to job creation, adding that a detailed review of the applicable regulations should also be undertaken by the government.
Six parties interested in buying PSM: minister
However, according to officials, owing to some observations of the Sindh government, the suggested option was found unviable.
Experts suggested that available land of PSM other than the land on which the mill had been built may be utilised for establishing steel-related industrial units for revenue generation. The Ministry of Industries and Production, in a meeting, told the Economic Coordination Committee (ECC) that Russian and Chinese companies were interested in running PSM, but the major challenge was the mill’s huge outstanding liabilities. After detailed deliberations, the ECC agreed to place PSM on the privatisation list and directed the Privatisation Division to initiate due process for the mill’s sell-off.
The ECC also decided that implementation of a revival plan based on private-sector input may be initiated and a report be submitted to the Cabinet Committee on Privatisation within six months for its consideration. The hiring of a transactional adviser and evaluation of foreign investors expressing interest in the steel mill would be the responsibility of the Privatisation Division, it said.
In their report, the experts said in order to make PSM operations profitable and sustainable, the current organisational structure – manpower and non-core departments – had to be rationalised and aligned with international best practices.
The expert group was of the view that PSM should not be privatised and shut down as it is a strategic asset of national interest.
It emphasised that the revival of PSM was technically possible through a phase-wise approach targeting first the downstream hot-rolled coil/cold-rolled coil (HRC/CRC) operations with a parallel revamp and retrofitting of upstream equipment. This would help in restoring the 1.1-million-ton-per-annum production capacity of the mill, followed by its expansion to 3 million tons, it said. The experts recommended the exploitation of domestic iron ore and coal reserves for their consumption in PSM by offering supportive fiscal incentives and a regulatory package to mining companies.
$100m required to revive Pakistan Steel Mills: Dawood
They said the government should establish public-private partnership in a bid to stimulate the necessary capital investment and obtain the requisite technical expertise for the successful revival, expansion and subsequent sustainable operations of PSM. It recommended the hiring of a transaction advisory consortium for selecting the preferred bidder and implementation of the liability settlement plan. The Ministry of Industries had proposed two options to the ECC – putting PSM on the privatisation list and hiring a transaction adviser for bid selection.
Published in The Express Tribune, May 19th, 2019.
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Utilities could feel the impact of flooding in the Midwestern US for months to come, railroad and coal sector representatives said.
Powder River Basin coal shipments were hit the hardest by the combination of cold winter weather early in the first quarter followed by strong rain in mid-March, resulting in flooding that railroad representatives said they had never previously seen.
Linda Brandl, Union Pacific’s vice president of energy, said at the Surface Transportation Board’s Rail Energy Transportation Advisory Committee Meeting that the frozen ground in the region could not absorb the water, making way for “unprecedented” flooding. Small vehicle-sized ice chunks in the rivers broke off as well and were strewn across the region.
Union Pacific’s network saw 13-day outages in some areas during the period, marking the worst of Brandl’s career, she said. The railroad worked with customers and “rerouted as many of the 50 trains a day that typically traverse that corridor as we could.”
Union Pacific and BNSF Railway, two of the large railroads that were hit the hardest, put together operating plans to keep Powder River Basin coal flowing to utilities, said George Duggan, who leads BNSF’s coal business.
While the railroads deal with inclement weather every year, it typically does not result in the level of damage the network saw this spring, he said. BNSF raised tracks 10-15 feet higher in some areas after a prior flood, but the water still reached the tracks and five subdivisions are still under water.
“I had the opportunity to work with our customers in the 2011 floods,” he said. “The magnitude of this one was two, three times that.”
BNSF has improved its surface track and is loading 40 or so coal trains a day in the Powder River Basin, Duggan said, and working with customers to recover and reload inventories.
Union Pacific expects continued improvements and is seeing residual effects, including in the Mississippi River region, Brandl said. Despite the circumstances, the railroad saw a 19% year-on-year improvement in freight car dwell during Q1 and a 7% increase in freight car velocity over the period.
Scott Yaeger, Peabody Energy Corp.’s director of transportation, said train loadings in the region came to a “screeching halt” in March, but Union Pacific and BNSF still shipped roughly 60% of the producer’s customer-nominated demand that month and recovered to “pre-flood levels” in April. The devastation occurred in an area “critical to Powder River Basin coal traffic,” he said.
“It was in the main corridors where 80% or more of Powder River Basin coal travels,” Yaeger said, “and the fact that they were able to recover as quickly as they [could] was really a remarkable thing.”
FLOODING LOSSES
Jennifer Hood, vice president of transportation for Contura Energy, referencing an estimate from Doyle Trading Consultants, said that about 5.5 million st of coal deliveries were lost as a result of the flooding, much of which occurred in March and the first half of April.
“While obviously everyone hopes that those deliveries can be made up this year, May and June are historically the wettest months of the year in Montana and Wyoming,” she said, “So it’ll be after that before we see any material catch-up.”
Brian Fuller, director of coal services at Southern Company, said utilities are usually trying to build their inventories in the spring to prepare for higher summer demand, but his company was unable to do so to the extent executives would have liked. He estimated the utility’s inventory is about 10-20% lower than the company would prefer.
“We’re going to be behind a little bit of the curve going into the summer,” Fuller said. “We’ll be okay, but we will have to continue to build that inventory back throughout the summer and even into the fall period.”
Brazilian miner Vale’s tailings dam in the town of Barao de Cocais in Minas Gerais has up to a 15% chance of breaking, the state’s environment secretary said on Monday.
The dam at Vale’s Gongo Soco mine is about 40 miles (64 km)from Brumadinho, where a tailings dam collapse unleashed a torrent of toxic mud in late January, killing more than 240 people.
Environment Secretary Germano Vieira disclosed the estimate after discussing the matter with prosecutors and the company itself.
Vale said last week that the dam was at risk of rupturing.
The warnings about another possible dam collapse have underlined concern about the stability of Vale’s tailings dams in general after the world’s largest iron ore miner suffered two deadly accidents in a little over three years.
A dam burst could be triggered by slippage in the embankment at the Gongo Soco mine, Vieira said.
“The breach of the embankment is going to happen,” he told reporters. “What we don’t know is whether that breach will affect the dam.”
He then cited an estimate from an independent auditing firm that the chance of a dam burst was “one in ten, or one in eight, leading to a 10-15% probability” of collapse.
Although Vale has previously said it remains unclear whether an embankment slippage could trigger a collapse, it announced on Saturday that it had begun building a concrete structure 6 km (3.7 miles) downstream of the dam that could contain a large portion of the tailings.
“The goal is to reduce potential impacts on people and the environment in the extreme case of a breach,” Vale said.
China’s steel futures edged up on Tuesday despite the concerns over escalating tension between the world’s top two economies, as investors expect stronger steel demand from property market.
Although the costlier trade war had weighed on financial markets across countries, Chinese steel futures still managed to make some gains, supported by better-than-expected demand from property sector.
“Downstream steel demand (manufacturing and construction) remains firm, with the latest construction data reflecting improving construction activities,” Hui Heng Tan, research analyst from Marex Spectron, said in a note.
Average new home prices in China’s 70 major cities edged up 0.6% in April, while China’s real estate investment surged 12% in April from a year earlier, the official data showed.
“Steel inventory has not been seen piling up at traders and mills, indicating demand is still solid,” a Shanghai-based trader said.
The Sino-U.S. trade war escalated after the U.S. Commerce Department last week added China’s telecom giant Huawei and its 68 entities to an export blacklist that makes it nearly impossible for the Chinese company to purchase goods made in the United States.
Alphabet Inc’s Google was reported to have suspended some business with Huawei after Trump’s blacklist.
Benchmark Shanghai rebar prices rose 1.7% to 3,838 yuan ($556.17) a tonne as of 0208 GMT. Hot-rolled coil futures advanced 0.8% to 3,680 yuan.
Dalian iron ore futures dropped 0.4% on Tuesday to 704.5 yuan per tonne after hitting to all-time record high level in the previous level, disturbed by market talking about Brazil’s Vale SA to reopen some operations at its Brucutu mine.
On Monday, Mysteel, a Chinese commodities consultancy, reported that Vale would resume a third of production, or 10 million tonnes, at its biggest iron ore mines in Minas Gerais which has been shut since a tailings dam accident in January, killing hundreds of people.
Vale did not release any comment regarding the report.
The company said on Tuesday it has suspended the transport of freight on the Belo Horizonte branch line between Sabara and Barao de Cocais, a line operating in the vicinity of the Congo Soco mine pit where a dam was identified at risk of rupturing.
Dalian coking coal was little changed at 1,389 yuan, while coke contract rose 2.8% to 2,219 yuan a tonne, buoyed by strong physical prices.
Texas pipeline protesters face jail time under new proposal
By Rachel Adams-Heard on 5/21/2019
HOUSTON (Bloomberg) -- Oil pipeline protesters who interrupt operations or damage equipment could face up to 10 years in prison under legislation approved by Texas lawmakers.
The measure, authored by Republican Representative Chris Paddie, cleared the Texas House on May 7 and the Senate on Monday. The Texas Oil & Gas Association applauded its passage and said the bill provides property owners and pipeline companies “greater protections against intentional damage, delays, and stoppages caused by illegal activity.”
The bill still needs Governor Greg Abbott’s signature to become law.
Environmental groups, meanwhile, called the measure an assault on free speech. “The bill was never about safety and security,” Cyrus Reed, interim director for the Sierra Club’s Lone Star Chapter, said in an email. “It was about silencing protesters trying to protect their water and land.”
Keystone XL
States have been taking action to prepare for pipeline protests as environmental groups increasingly target infrastructure as part of their opposition to fossil fuels.
Earlier this year, South Dakota advanced legislation to allow the state to seek money from pipeline companies to help cover expenses related to protests. That bill aims to ready South Dakota for the contentious Keystone XL crude oil pipeline, which is held up in court but recently scored a new presidential permit from the Trump administration.
Other projects, including Energy Transfer LP’s Dakota Access crude pipeline and EQM Midstream Partners LP’s Mountain Valley gas conduit, have also drawn on-the-ground protests. Even in Texas, which is considered friendlier to the oil and gas industry, activists have staged opposition to the Trans-Pecos pipeline, which runs through the Big Bend region in the western part of the state.
Related News ///
FROM THE ARCHIVE ///
https://www.worldoil.com/news/2019/5/21/texas-pipeline-protesters-face-jail-time-under-new-proposal
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De Beers’s diamond sales plunged to the lowest since 2017 in the company’s latest offering, underlining a slump in the industry worldwide.
Sales by the Anglo American Plc unit dropped 25% from a year ago to $415 million, and were down 29% from an offering last month. It’s often a quieter time of the year because the industry has already restocked after the key holiday period, but total sales so far in 2019 are still much weaker than in previous years.
De Beers Sales Slump Source: De Beers
Diamond miners are struggling across the board, especially those producing cheaper and smaller gems where there is too much supply. In December, some of Rio Tinto Group’s customers refused to buy cheaper stones, while De Beers was forced to cut prices toward the end of last year and offer concessions to buyers.
Still, De Beers has held prices relatively stable so far this year. That has led to customers declining to take up all the stones they’d previously agreed to buy as they struggle to make a profit at current prices. They’ve also been hit by a shortage of finance and stagnant end demand, and a weaker rupee has made gems more expensive for Indian manufacturers, who cut or polish about 90% of the world’s stones.
"Cycle four saw lower rough-diamond sales against a backdrop of macroeconomic uncertainty, and as we enter a seasonally slower period for the industry with Indian factories closing temporarily for the traditional holiday period,” De Beers Chief Executive Officer Bruce Cleaver said in a statement.
De Beers sells gems at 10 sales a year in Botswana to a select group of customers. The buyers are expected to specify the number and type of diamonds they want, and then carry out the purchases at a price set by De Beers.
Three blast furnaces of over 2,000 m³ and two converters of 120 t will be built in Jiangsu, China’s second-biggest steelmaking hub, according to the notice on the website of the Industry and Information Technology Development of the province released on Monday May 20.
Zhongxin Iron and Steel Group, formerly known as Xuzhou Huahong Special Steel, plan to start the construction of two 2,050-m³ blast furnaces and two 120-t converters in June, with the commissioning likely two years later. This was done through a swap of 4.36 million mt of iron-making capacity and 3.4 million mt of steelmaking capacity across Chengri Iron & Steel, Penggang Iron and Steel, Taifa Steel, and Rongyang Iron and Steel.
Another blast furnace, of 2,120 m ³is owned by Xuzhou Iron and Steel, and will likely begin construction also in June and commence operation in June 2021. A swap of iron-making capacity of 2.26 million mt contributed to this move.
The outlook for China's steel market has fallen to a four-year low, with the seasonally slower period expected to dampen new orders and steel prices, according to the latest S&P Global Platts China Steel Sentiment Index or CSSI, which showed a headline reading of just 12.79 out of a possible 100 points in May.
The headline CSSI, which measures the outlook for new steel orders over the coming month, fell by 12.89 points from 25.68 in April. It was the lowest reading since February 2015, and the third consecutive monthly decrease.
A reading above 50 indicates expectations of an increase/expansion and a reading below 50 indicates a decrease/contraction.
The outlook for steel prices slumped by 40.96 points from last month to 25.99 in May, the weakest reading since November last year.
More market participants this month believed crude steel production would fall over the next month, largely due to government mandated output cuts in Hebei province to lower emissions. Steel inventories were expected to stay at similar levels to last month, with the measure edging up slightly by 3.88 points.
Index history shows that May and June are seasonally softer months due to the wet weather that affects steel demand and activity in parts of China. The weak outlook for steel prices is slightly surprising given the recent surge in iron ore prices. Most steelmakers doubt their ability to pass through higher raw materials costs to the end customer because of tepid demand and plenty of competition in domestic and export markets.
Surging crude steel production in April has also tempered expectations of robust steel demand and prices over the coming month.
The CSSI is based on a survey of around 50 China-based traders and steel mills.
PJSC Magnitogorsk Iron and Steel Works’ (MMK) new hi-tech sinter plant, the second stage of which is scheduled for commissioning in the near future, is expected to add an additional c. USD 40 mln to the Company’s EBITDA per year. In addition to the increased productivity, the unit should significantly decrease MMK’s environmental impact. The news was shared with investors at the international Global Metals, Mining & Steel conference in Barcelona, organised by Bank of America Merrill Lynch. MMK’s delegation was led by CEO Pavel Shilyaev.
Sinter plant No 5 has a capacity of up to 5.5 mln tonnes of high-quality raw materials per year. Agglomerate with higher iron content allows to increase productivity and decrease coke consumption, thus the cost of producing pig iron using agglomerate from the new unit should decline by USD 8 per tonne. The first stage of the sinter plant was commissioned in April 2019.
The new unit will operate using the best available energy-saving technologies which will significantly improve environmental safety. Emissions of dust into the atmosphere will be reduced by 2.1 thousand tonnes per year and sulphur dioxide emissions will be reduced by 3.5 thousand tonnes per year. In addition, the discharge of suspended solids into the water circulation supply system will be reduced by 600 tonnes per year and emissions of benzopyrene will be reduced by almost a quarter.
Construction of the new sinter plant is part of MMK’s large-scale investment strategy, which includes significant upgrades to the first processing stage. ММК has already started design works for the construction of a new coke battery, upon commissioning of which five existing batteries will be gradually decommissioned. MMK also plans to construct a new blast furnace which will replace three existing ones. While implementing its investment programme, MMK aims to further decrease production costs and improve the quality of its products, while focusing on environmental protection.
MMK is one of the world’s largest steel producers and a leading Russian metals company. The company’s operations in Russia include a large steel-producing unit encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2018, the company produced 12.7 mln tonnes of crude steel and 11.7 mln tonnes of commercial steel products. MMK Group had sales in 2018 of USD 8,214 mln and EBITDA of USD 2,418 mln.
Steel scrap usage rose 10.1% to 469.3 million mt last year in countries that represent 81% of global steel production, as nations including China strive to reduce carbon emissions, Rolf Willeke, ferrous division statistical adviser to International Recycling Bureau BIR said Tuesday.
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Sign Up Crude steel production rose 4.5% to 1.469 billion mt in the same countries in 2018, Willeke also said at a bureau congress in Singapore.
Globally, crude steel production via the scrap-based electric arc furnace production route grew 12% to 524 million mt, to represent 29.4% of total crude steel output, which also grew 4.5% last year to 1.808 billion mt, according to World Steel Association figures.
The increase in steel scrap usage was led by China, where usage jumped 27% last year to 187.8 million mt, as the share of EAF steelmaking grew to represent 13% of the nation's total steel output of 928.3 million mt, up from a 9.3% share in 2017. Overall, the proportion of steel scrap used in the country's steel production rose to 20.2% in 2018.
China is the world's biggest ferrous scrap user and its use of EAF steelmaking, with lower carbon emissions than blast-furnace-based steelmaking, is growing due to stricter environmental quality standards being introduced by the government.
In other regions, scrap usage in 2018 grew 0.3% in the EU, 2.2% in the US, 2.1% in Japan, and 5.5% in Russia, while in Turkey scrap usage fell 0.4% and in South Korea it fell 2.3%, Willeke said.
Scrap volumes traded internationally, including intra-EU trade, rose 2.6% in 2018 to 105.4 million mt to remained below the recent peak of 110.8 mt traded in 2011, according to Willeke.
The main scrap importers last year were Turkey, where imports fell 1.5% from the previous year to 20 million mt, supplied mainly by the US; South Korea, where imports grew 3.5% to 6.393 million mt, mainly supplied by Japan; and India, where imports grew 18% to 6.33 million mt, supplied mainly by the UAE.
The main scrap exporters last year were the EU, which exported 21.436 million mt, up 6.7% from 2017; and the US, whose exports jumped 15.4% to 17.33 million mt. The main buyer in both instances was Turkey. The third biggest ferrous scrap exporter last year was Japan, whose sales abroad fell 9.8% to 7.5 million mt, the main customer being South Korea.
Fortescue Metals Group Ltd on Wednesday said it will spend about $287 million to develop the Queens Valley mining area in the iron ore rich Pilbara region of Western Australia.
The development is part of the world’s No.4 iron ore miner’s plan to boost margins through higher grade products, Fortescue said in a statement.
“The Queens mining area development will maintain our highly valued Kings Fines low-alumina sinter fines product which supplies Fortescue’s key customers in China as well as in Japan and Korea,” Chief Executive Officer, Elizabeth Gaines said.
Fortescue has been attempting to shore up demand by moving to produce higher grade iron ore, given that its lower grade products had fallen out of favor with Chinese buyers facing environmental restrictions.
In April, the miner said it would spend about $2.6 billion with a Taiwanese partner to develop a “premium product” iron ore project in Western Australia.
The Queens development is estimated to have a life of 10-15 years. The miner has obtained environmental and heritage approvals to start work on the project.
Non-integrated steel companies with no access to captive iron ore resources will see production disrupt in 2020 if iron ore mining auctions are delayed. A report by credit rating agency India Ratings expects that companies such as JSW Steel, Rashtriya Ispat Nigam Ltd, and those that are either under stress or referred to National Company Law Tribunal will be hit.
Given that an auction process on an average takes three to six months to complete, a delay in initiating them until the latter half of 2019 due to Lok Sabha elections in the country could affect the timely auction of mining lease. The iron and steel industry has a total fund-based banking credit of ₹2.85 lakh crore, and most players in the industry do not have assured access to iron ore.
The absence of domestic iron ore supply thereby will necessitate an increase in the import of iron ore mix, potentially leading to an increase in the cost of production. However, low-grade options are available for players such as JSW Steel which has a beneficiation facility, the report said. Furthermore, smaller companies which are away from ports and operate in landlocked regions could face disruption in operations as they are primarily dependent on the domestic merchant miners for iron ore.
In its report, India Ratings said steel production would be significantly hit if the auction of the mines which would complete 50 years of operations by March 2020 was materially delayed. Consequently, the credit profile of merchant miners and thus non-integrated steel players could come under stress.
The licenses of about 288 merchant mines will expire by March 2020, of which 59 mines are under operations. Majority of these 59 mines are iron ore mines situated in Odisha and Karnataka with around 85 million tonnes of approved annual capacity. The agency estimated that around 60 million tonnes of the actual production of iron ore from these mines could be disrupted.
India also has a frail track record for auctions. Of the last major auctions of about 88 iron ore deposits, only a handful have started to operate. The auction-to-operation process gets stretched typically due to delays in obtaining environmental, wildlife and forest clearances. The G2 resource prospection is a pre-requisite for auction which some of these mines may not have at the moment. JSW Steel Ltd has been among the few players which have been able to start production from mines acquired under the auction.
An industry expert, who did not wish to be named, told Mint to ensure limited disruption to volumes, the government agencies may plan to extend expiry deadlines for mines along with awarding of licenses. “When the auctions do take place, steel companies will be willing to be pay top dollar for the resources. We saw the same happen with cement companies that wanted access to limestone resources.”
India Ratings also said a clear, timely instruction on the settlement/ removal /transfer of infrastructure of the erstwhile mine owner could speed-up the resumption of mining activity. Additionally, operational mines could take lesser time to resume operations post auctions as against undeveloped mines.
Besides this, India’s biggest miner, NMDC Ltd, may be able to increase volumes to 4-5mtpa with evacuation facilities being placed at its captive mines. Its 7mtpa Donnimalai mine can re-start operations after the settlement of a dispute between the government agencies on premium payment, India Ratings said.
Imported iron ore is at least 150% of the domestic procurement prices; given the import is an expensive option, the agency said, adding that import volumes were unlikely to go up substantially.
China’s top steel maker Baowu Group is studying plans to relocate blast furnaces from remote Xinjiang to Cambodia in a bold example of China’s heavy industry shifting excess capacity overseas, a source familiar with the firm’s plans said.
The move, which would mark Baowu’s first overseas production, shows the lengths Chinese steelmakers are prepared to go to maintain output levels despite Beijing’s drive to cut industrial slack in the mainland.
Baowu is looking at the feasibility of shipping two blast furnaces, with a combined capacity of 3.1 million tonnes, along with two converters to turn iron into steel, to Cambodia in late 2019, a senior Baowu manager involved with the plan told Reuters.
The manager declined to be named as he is not allowed to talk to media. Baowu did not respond to emails seeking comment.
China has shut more than 150 million tonnes of steel capacity in the past three years as part of a campaign to modernize its economy, but still accounts for half of global output, with capacity of 980 million tonnes a year.
The equipment to be moved would come from Xinjiang Bayi Nanjiang Steel Baicheng Co Ltd, a Baowu subsidiary based in Aksu in far northwest China. The plant was shut in 2017 and sits some 4,000 km (2,480 miles) from the Cambodian capital of Phnom Penh.
“This equipment may be seen as outdated in China, but it is still quite advanced in Cambodia,” the manager said.
GRAB FOR GROWTH
Analysts said establishing a steel industry in Cambodia - either shipped in or newly built - will present challenges.
“It would be very difficult to set up steel mills in Cambodia, given their lack of infrastructure like railways and utilities, and a noncommittal investment environment,” said Ming He, analyst at Wood Mackenzie in Beijing.
However, Baowu is hoping to cash in on a local construction boom.
Cambodia, which imports all its steel needs, is rapidly urbanizing, building major infrastructure projects including ports, freeways and residential and commercial properties.
It posted GDP growth of 7.3% in 2018, making it the world’s sixth fastest-growing economy, according to the IMF.
Cambodia’s Commerce Ministry, did not respond to a Reuters request for comment.
“Since Chinese investments are driving the construction boom in Cambodia, it seems natural that Chinese investors will also find it beneficial to set up a steel plant to cater to this demand,” said Arshiya Sibia, an analyst at CRU in Singapore.
However, moving blast furnaces and other large equipment from China’s remote northwest interior all the way to southern Southeast Asia in a cost-effective way will be a challenge.
It’s rare for Chinese mills to relocate actual steel-making equipment to other countries, apart from those who sneaked out banned small-scale induction furnaces after Beijing’s crackdown on low-grade steel in 2017.
Given the sheer scale of some of the equipment — blast furnaces can weigh thousands of tonnes — the most likely route will be by train to China’s east coast, and then by ship to southern Cambodia, a journey of more than 6,000 km, analysts said.
OFFSHORE ALTERNATIVES
Baowu is also weighing other locations.
“Cambodia is a preferred option ... But we also have a back-up plan of moving them (the furnaces) to Pakistan,” said the Baowu manager.
The firm is also looking into expansion in Chile, he added.
A move offshore would see Baowu would join other Chinese firms that have expanded by buying foreign assets or setting up joint-ventures with overseas partners to maintain or expand overall production.
Tsingshan Stainless Steel, the world’s top stainless steel maker, will produce nearly 30 percent of its total stainless steel capacity in Indonesia this year, while another 10 Chinese firms have set up joint steel ventures in Indonesia, according to company statements.
In January, HBIS Group, China’s no.2 steelmaker, said it will buy Tata Steel’s assets in Thailand and Singapore with a combined annual capacity of 3.7 million tonnes.
Baowu’s listed arm Baoshan Iron and Steel confirmed last month it had formed a special team to look at steelmaking bases overseas.
“(We) aim to make a breakthrough within three years,” Baosteel’s chief financial officer Wu Kunzong told an earnings conference call.
* The Dalian Commodity Exchange on Wednesday told investors to trade “rationally” after noting large fluctuations in the futures prices of iron ore and coke on the bourse.
* Chinese iron ore futures climbed as much as 4.1% to 733 yuan ($106) a tonne on Wednesday, the highest level since the contract was launched in 2013, before closing up 3.4%.
* Coke, another steelmaking ingredient, jumped as much as 5.3% to a nine-month peak.
* “In recent times, the economic and financial situation at home and abroad has become more complex and variable,” the exchange said in a statement on its website, urging members to strengthen risk management.
Technical Considerations
POSCO (PKX) stock positioned -18.15% distance from the 200-day MA and stock price situated -12.57% away from the 50-day MA while located -7.61% off of the 20-day MA. POSCO (PKX) traded moved -20.11% from the 50-day high price and spotted a change of 0.99% from the 50-day low point.
RSI value sited with reading of 28.35. Relative Strength Index (RSI) is an extremely useful and popular momentum oscillator. The RSI compares the magnitude of a stock’s recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It takes a single parameter, the number of time periods to use in the calculation. In his book, Wilder recommends using 14 periods.
Wilder recommended using 70 and 30 as overbought and oversold levels respectively. Generally, if the RSI rises above 30 it is considered bullish for the underlying stock. Conversely, if the RSI falls below 70, it is a bearish signal. Some traders identify the long-term trend and then use extreme readings for entry points. If the long-term trend is bullish, then oversold readings could mark potential entry points.
Investors tracking shares of POSCO (PKX) may be focusing on where the stock is trading relative to its 52-week high and low. At the time of writing, the stock had recently reached at $48.91. At this price, shares can be seen trading -43.88% off of the 52-week high mark and 0.99% away from the 52-week low. Investors often pay increased attention to a stock when it is nearing either mark. The Price Range 52 Weeks is one of the tools that investors use to determine the lowest and highest price at which a stock has traded in the previous 52 weeks. It has a market cap of $17192.84M.
Volume Evaluation
Active moving action has been spotted in POSCO (PKX) on Tuesday as stock is moving on change of 0.85% from the open. The US listed company saw a recent price trade of $48.91 and 221894 shares have traded hands in the session. There are 171.14K shares which are traded as an average over the last three months period.
Many investors forget that one of the defining characteristics of the stock market is that it’s a market. Buyers and sellers help determine the price of each stock, and the more buyers and sellers a particular stock has interested in it, the more liquid the market will be. Liquidity can have a profound impact on just how violently stock prices can move in either direction, and the reasons have to do with the nature of the market in a stock’s shares.
Trading volume, or volume, is the number of shares or contracts that indicates the overall activity of a security or market for a given period. Trading volume is an important technical indicator an investor uses to confirm a trend or trend reversal. Volume gives an investor an idea of the price action of a security and whether they should buy or sell the security.
Performance Levels
Looking performance record on shares of POSCO (PKX) we observed that the stock has seen a move -41.06% over the last 52-week trading period. The stock generated performance of -20.04% tracking last 3 months and -14.61% over the recent 6 months. Investors will be anxiously watching to see if things will turn around and the stock will start gaining or losing momentum over the next few months. If we look back year-to-date, the stock has performed -10.98%. Shares are at -2.65% over the previous week and -14.95% over the past month.
Analyst Views: Fluctuating the focus to what the Wall Street analysts are projecting, we can see that the current consensus target price on shares is $61. Analysts often put in a lot of work to study stocks that they cover. Wall Street analysts have a consensus recommendation of 3 on this stock. This number falls on a one to five scale where a 1 would be considered a strong buy and 5 means a strong sell, 2 shows Buy, 3 Hold, 4 reveals Sell recommendation.
Volatility Insights
Watching some historical volatility numbers on shares of POSCO (PKX) we can see that the 30 days volatility is presently 1.52%. The 7 days volatility is 1.29%. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period.
The company has a beta of 1.13. 1.00 indicates that its price is correlated with the market. Less than 1.00 shows less volatility than the market. Beta greater than 1.00 indicates that the security’s price is theoretically more volatile than the market.
The Average True Range (ATR) value reported at 1.08. The average true range (ATR) is a technical analysis indicator that measures volatility by decomposing the entire range of an asset price for that period. A stock experiencing a high level of volatility has a higher ATR, and a low volatility stock has a lower ATR. The ATR may be used by market technicians to enter and exit trades, and it is a useful tool to add to a trading system. It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations. The indicator does not indicate the price direction; rather it is used primarily to measure volatility caused by gaps and limit up or down moves. The ATR is fairly simple to calculate and only needs historical price data.
BHP says it has no appetite for new investments in thermal coal, regardless of how lucrative those investments may be, but has also signalled it is unlikely to invest in commodities like lithium and cobalt.
The hardening of BHP’s attitude toward the type of coal used for power generation was revealed in a slide pack published ahead of a strategy briefing by chief financial officer Peter Beaven.
The presentation declares that the decarbonisation of the energy sector will see thermal coal ”phased out, potentially sooner than expected”.
BHP then added that it had “no appetite for growth in energy coal regardless of asset attractiveness”.
”Our energy coal exposure is just three per cent of our asset base. But it is made up of two very high quality mines which generate high margins. Our focus will be on maximising value to shareholders, whether we are long term owners or not,” Mr Beaven told analysts on Wednesday morning.
The comments come after Deutsche analyst James Gurry said this week that he expects BHP to exit its thermal coal assets, which comprise the Mt Arthur mine in New South Wales and a stake in the Cerrejon business in Colombia.
Mr Gurry said in a note that he valued BHP’s thermal coal assets at more than $US2.5 billion ($3.6 billion).
Mt Arthur has valuable tax loss assets, but Mr Gurry noted that the mine’s recent profitability had reduced the value of those tax shields.
The trends marginalising coal are expected to create strong demand for the minerals that are used in modern batteries and electric vehicles, and BHP is particularly optimistic about demand for copper and nickel.
”We can, with a degree of conviction, say that adding options in copper and nickel sulphides (as opposed to laterites) are likely to be a sound investment. Demand will grow and, at the same time, new supply sources will be hard to discover and permit, and will be more expensive to develop,” said Mr Beaven.
”We are interested in adding more nickel sulphide resource to our portfolio. So we should continue to add exploration options in these areas.”
But Mr Beaven was surprisingly dismissive about the attractiveness of other battery commodities like lithium and cobalt.
”While demand for batteries will drive lithium and, to a lesser extent, cobalt demand, we also believe that abundant supply of the former, and substitution of the latter, reduces the attractiveness of these commodities for us,” he said.
BHP is expected to decide within 18 months whether to spend up to $US5.7 billion on the first stage of Canada’s Jansen potash project.
Rival potash producers warned last week that potash markets were already oversupplied and BHP would find it hard to make money from potash.
Mr Beaven signalled that BHP was mindful of the existing supply and demand situation, and would only bring Jansen into production once the potash market was tighter.
”Jansen makes sense on a strategic level. It creates a high-margin, long-life asset, with multiple, basin-wide, expansion opportunities. But as existing excess supply capacity will only be utilised by the middle of next decade, so first production from Jansen could only arrive in that time frame,” he said.
”But this is a large investment and the first stage has to pass the risk-return hurdles in the capital allocation framework, and that has not yet happened.
”We will not invest in markets that do not require additional capacity. But we must be prepared to invest counter-cyclically.
”We may conclude that we like the commodity and the resource characteristics, but the individual project does not pass the capital allocation framework test.”
https://www.hellenicshippingnews.com/bhp-dark-on-thermal-coals-future/
The Chinese market saw the conclusion of two trades of US Buchanan coking coal with 40% CSR, 18%-19%VM, 7%TM and 5-6% Ash as offers, excluding 3% import duty and 25% tariffs, have fallen to entice buying interest, Platts confirmed Thursday.
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Sign Up A trade was done Thursday for 135,000 mt of Buchanan at $152/mt CFR China, excluding 3% import duty and 25% tariffs. This was for an on-the-water cargo. Considering the import duty and tariffs, the trade would be equivalent to $195.70/mt CFR China. This was done to a Chinese steelmaker.
Another trade was done late last week for 60,000 mt of the same coal at $152/mt CFR China, excluding 3% import duty and 25% tariffs as well and on-the-water cargo.
The Chinese steelmaker said that offers for Buchanan have been lowered on several occasions. The attempt to lower offers can be considered as a sellers' intention of absorbing the duties and tariffs imposed.
"Furthermore, our mill would like to have Buchanan in their coal blending requirements," the Chinese steelmaker said.
Buchanan was heard actively offering in the Chinese market April, where the offer price was around $207/mt CFR China inclusive of the 3% import duty and 25% tariffs. However, Chinese users were not keen until recently, the offer was revised to around $153-154/mt levels, excluding 3% import duty and 25% tariffs.
Another Chinese steelmaker who was considering to buy Buchanan last week said that steelmakers show interests in Buchanan for its 5-6% Ash content. He did not conclude a Buchanan trade eventually as he deemed the price as uncompetitive still.
According to Platts spot trade data, Buchanan was last traded at $180.50/mt CFR China excluding 3% import duty during late-May 2018. Shortly, there were news of potential tariffs imposition of US origin coking coal which was eventually in place on August 2018. This meant that Chinese steelmakers have been working on a coal blending that eliminates the use of Buchanan coking coal.
Recently, the Chinese Ministry of Finance has allowed for exemptions on US imports, including coking coal on May 15. The exemptions may be granted on several grounds. Among others, Chinese users facing difficulty in seeking alternative options may apply, or if the tariffs implemented have resulted in significant economic losses. Those who find that the tariffs implemented have resulted in major consequences such as an industry's development, technological progress or environmental efforts may also apply.
However, the two Chinese buyers of Buchanan gave ambivalent responses.
"We will not be applying for the exemptions as there is no good reason for it," one Chinese steelmaker said, adding that there were other considerations of higher priority eg customs related concerns pertaining to the procurement of US coking coal.
"I am still contemplating if I should apply for the exemptions but I do not harbor any hopes that it will be accepted," the other Chinese buyer said.
According to China's customs statistics, China imported 60,585 mt of US coking coal in the first quarter of 2019, down 45% compared with the same period a year ago. In 2018, China imported 2.1 million mt of US coking coal, down 33% compared with the same period a year ago.
