SINGAPORE: Oil prices fell on Wednesday, extending a plunge of more than 4% the previous day and hovering at their lowest since December, on expectations that a political dispute halting Libyan exports could be resolved and concerns over sluggish global demand.
Brent crude futures for November fell 43 cents, or 0.6%, to $73.32 by 0645 GMT, after the previous session's fall of 4.9%. U.S. West Texas Intermediate crude futures for October were down 49 cents, or 0.7%, at $69.85, after dropping 4.4% on Tuesday.
Both contracts fell to their lowest since December on signs of a deal to resolve the political dispute between rival factions in Libya that cut output by about half and curbed exports.
"Selling continued in Asia amid expectations of a potential deal to resolve the dispute in Libya," said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
"The market remained under pressure also because of concerns over sluggish fuel demand following weak economic indicators from China and the United States."
Libya's two legislative bodies agreed on Tuesday to jointly appoint a central bank governor, potentially defusing the battle for control of oil revenue that set off the dispute.
Libyan oil exports at major ports were halted on Monday and production cut nationwide. Libya's National Oil Corp (NOC) declared force majeure on its El Feel oilfield from Sept. 2.
"Easing political tension in Libya potentially seeing some supplies return and economic weakness in the world's largest oil consumers, U.S. and China, serve as a confluence of headwinds for oil prices," said Yeap Jun Rong, a market strategist at IG.
"The faster contraction in new orders and production, along with increasing prices, presented in the U.S. manufacturing PMI data seems to be renewing growth fears, which does not offer much reassurance around the oil demand outlook."
Market sentiment weakened after Tuesday's Institute for Supply Management data showing that U.S. manufacturing remained subdued, despite a modest improvement in August from an eight-month low in July.
In China, the world's biggest importer of crude, recent data showed that manufacturing activity sank to a six-month low in August, when growth in new home prices slowed.
Weekly U.S. inventory data has been delayed by Monday's Labor Day holiday. The report from the American Petroleum Institute is due at 4:30 p.m. EDT (2030 GMT) on Wednesday and data from the Energy Information Administration will be published at 11:00 a.m. EDT (1500 GMT) on Thursday.
U.S. crude oil and gasoline stockpiles were expected to have fallen last week, while distillate inventories probably rose, a preliminary Reuters poll showed on Tuesday. - Reuters
Stockpiles of oil products at the UAE's Port of Fujairah dropped to a three-week low as of Sept. 2, with heavy distillates used as ship fuel and for power generation dropping 10% in one week, according to the Fujairah Oil Industry Zone.
The total fell 5.3% week on week to 16.858 million barrels as of Sept. 2, the lowest since Aug. 12, FOIZ data published Sept. 4 showed. Since mid-July, stockpiles have dropped every week except one, after bottoming out at a 10-month low of 16.458 million barrels on Aug. 12. Stockpiles have dropped 2.8% since the end of 2023.
Heavy distillates and residues declined to 8.001 million barrels, a two-week low and close to the two-and-a-half-year low of 7.802 million barrels on Aug. 19. Russia's fuel oil shipments to Fujairah soared in August to an average 84,700 b/d, from 59,100 b/d in July, but dropped to zero in the most recent week started Aug. 26, according to Kpler data.
Kommersant reported that Russia had raised its fuel oil exports in August after refineries increased processing following the end of spring maintenance, with the main destinations being China, India and Saudi Arabia. Processing, and subsequently exports, also increased at the Novoshakhtinsky and Tuapse refineries which earlier in the year had suspended operations after drone attacks.
Platts, part of S&P Global Commodity Insights, assessed high sulfur fuel oil delivered Fujairah at $460 per metric ton as of Aug. 30 from $453/t a week earlier. Low-sulfur fuel oil delivered Fujairah climbed to $614/t from $605/t over the same period.
Stockpiles of light distillates such as gasoline and naphtha at Fujairah climbed 3.5% in the latest week to 6.501 million barrels, a two-week high, while middle distillates, including diesel and jet fuel, declined 8.9% to 2.356 million barrels, the lowest in three weeks.
Product exports from Fujairah averaged 653,000 b/d in August, up from 534,000 b/d in July, led by Singapore at 164,000 b/d, according to Kpler data. Pakistan received 51,700 b/d of gasoline from Fujairah in August, the highest volume since July 2021, according to the data. There were no exports to Saudi Arabia in August for the first month since April 2022.
Since the end of 2023, heavy distillates have dropped 21%, middle distillates have fallen 6% and light distillates have climbed 39%.
The Trans Mountain Expansion Project, now finally completed after years of delays, is expanding access to markets for Canadian oil producers and is set to boost the price of Canada’s heavy crude oil for years to come, top executives at the major energy firms say.
The expanded pipeline is tripling the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The expanded pipeline provides increased transportation capacity for Canadian producers to get their oil out of Alberta and into the Pacific Coast and then to the U.S. West Coast or Asian markets.
TMX has reserved 20% of its capacity – or 178,000 bpd – to uncommitted customers, or spot shippers.
As a result of the increased competition from Trans Mountain, other pipeline operators – including Enbridge, operator of North America's largest crude oil pipeline network, Mainline – are cutting rates to transport crude on their network in September. Enbridge will ask lower tolls from companies to ship heavy crude from Hardisty, Alberta, to Texas on Enbridge’s networks, per company filings cited by Bloomberg.
As a result of TMX entering into service, crude trade flows are expected to shift, Wood Mackenzie’s analysts Lee Williams and Dylan White wrote in July.
“Wood Mackenzie data suggests that increased westbound flows will moderately cut into volumes moving on other routes out of Western Canada, especially crude-by-rail and Enbridge’s Mainline system,” they said.
Since Canadian producers continue to ramp up production, the excess pipeline capacity on the networks carrying crude from Canada to the demand centers in the U.S. should be filled fairly soon, according to analysts.
In June, California produced a daily average of 285,000 barrels of crude oil, according to new data from the Energy Information Administration. That’s the state’s lowest production of any month in the government’s dataset going back to 1981 and about a quarter of what California produced 40 years ago. This comes as the U.S. as a whole is producing a record amount of crude oil.
Twenty years ago, the U.S. was the world’s biggest net importer of oil from abroad, per Mark Finley, an energy researcher at Rice University. But those days are long gone.
“The United States is producing more oil than any country ever in the history of the planet,” he said.
The boom has turned the U.S. into a net oil exporter, Finley said. And it’s thanks in large part to one thing: “Shale, in a nutshell.”
Shale that can be fracked to get at the oil and gas inside it. Fracking took off around 2010, and it changed where the U.S. was producing its oil. New hotspots included the Bakken oil field in North Dakota and the Permian Basin in Texas and New Mexico. Meanwhile, traditional rigs in California — once a heavyweight producer — have been pumping fewer and fewer barrels since the 1980s.
“So those are old reservoirs and they’re in decline,” said Amy Myers Jaffe, a professor at NYU who researches energy markets.
California doesn’t have much in the way of potentially lucrative shale deposits, she said. So companies are investing elsewhere.
“It’s just not an attractive place to drill when there are other places, even in the United States, like Texas and other locations in the Southwest,” Jaffe said.
California’s regulatory environment is also changing, Jaffe added. Historically, she said the state didn’t restrict oil producers all that much — especially when it comes to water pollution caused by drilling.
“Surprisingly, California is pretty liberal about what they allow the companies to do with process water and things like that,” she said. “And if anything, California needs to tighten that up.”
Recently though, there are signs that’s happening, said Dan Kammen, a professor of energy at UC Berkeley.
“There’s been a series of rulings against the oil industry,” he said.
A state law taking effect this year prohibits the drilling of new oil wells within a half mile of homes or schools, due to concerns over respiratory health and air quality. And then there’s California’s effort to reduce reliance on fossil fuels.
“California was the first state to set an electric vehicle mandate. So gas-powered new cars will not be sold in California after 2035.
So with well-tapped geology below ground and a climate-focused statehouse above, Kammen doesn’t see California’s oil industry bouncing back — even as drillers around the country cash in on record production.
https://www.marketplace.org/2024/09/04/fracking-california-us-oil-production/
BOGOTÁ, Colombia (AP) — Thousands of Colombians were forced to walk to work on Tuesday, as truckers in major cities blocked highways to protest a recent increase in the price of diesel fuel.
Truckers unions have said that plans by the government to eliminate diesel fuel subsidies would put their businesses on the edge of bankruptcy, while the administration of left-wing President Gustavo Petro argues it must phase out subsidies to cut a growing budget deficit and direct more funds to education and health.
On Saturday, the government raised the price of diesel fuel to around $2.90 per gallon, a 50-cent increase from the previous price, following numerous meetings with truckers unions.
In response, the unions have been holding protests around the country, which intensified on Tuesday, with roadblocks in the cities of Bogotá, Medellin and Cali, that have diminished the amount of food arriving at wholesale markets.
Petro wrote on social media platform X that he would not let truckers unions “block” the country. The former activist, who has led numerous protests throughout his career, wrote Tuesday that fuel subsidies had to be removed in order to “reduce public debt” and “finance the health and education of Colombians.”
Subsidies for diesel fuel have been implemented in Colombia for decades, and previous governments have kept them in place, fearing that a removal could lead to massive protests and increases in food prices.
According to Colombia's Finance Ministry, diesel fuel subsidies cost the Colombian government around $240 million each month paid out to the state oil company Ecopetrol.
Some economists in Colombia have suggested that Ecopetrol sell its diesel fuel for a cheaper price within Colombia, but that would cut deeply into the company's margins, and affect shareholders of Ecopetrol, which is also listed on the New York Stock Exchange.
The government says it is planning to remove diesel fuel subsidies in three stages to enable transport companies to plan for the increase in prices. Officials in Colombia have said, however, that they are willing to meet with truckers unions to discuss ways in which they can be compensated for their higher operational costs.
The debate over fuel subsidies comes as the Finance Ministry gets ready to present a tax reform plan to Colombia's congress that seeks to raise government revenues by $3 billion next year.
Officials in Colombia have said they are planning to increase wealth taxes and taxes on personal income that does not come from wages. The finance ministry has also said it plans to increase sales taxes on hybrid cars and online betting.
During the first two years of Petro's administration, the government's annual budget has increased by around 30%, as Petro tries to boost spending on social welfare programs, and increases the number of state employees.
Manuel Rueda, The Associated Press
https://ca.finance.yahoo.com/news/colombian-truckers-block-highways-main-185946277.html
Chevron Corporation announced that it started water injection operations at two projects to boost oil and natural gas recovery at the company’s existing Jack/St. Malo and Tahiti facilities in the deepwater US Gulf of Mexico, where Chevron operations produce some of the world’s lowest carbon intensity oil and gas.
“Delivery of these two projects maximises returns from our existing resource base and contributes toward growing our production to 300,000 net barrels of oil equivalent per day in the US Gulf of Mexico by 2026,” said Bruce Niemeyer, President of Chevron Americas Exploration & Production. “These achievements follow the recent production startup at our high-pressure Anchor field, reinforcing Chevron’s position as a leader in technological delivery and project execution in the Gulf.”
At the Jack/St. Malo facility, Chevron achieved first water injection at the St. Malo field, the company’s first waterflood project in the deepwater Wilcox trend. The project was delivered under budget, with the addition of water injection facilities, two new production wells, and two new injection wells. It is expected to add approximately 175 million barrels of oil equivalent to the St. Malo field’s gross ultimate recovery.
The St. Malo field and Jack/St. Malo facility are approximately 280 miles (450 km) south of New Orleans, La., in approximately 7,000 feet (2,134 m) of water. Since the fields started production in 2014, Jack and St. Malo together have cumulatively produced almost 400 million gross barrels of oil equivalent.
At the Tahiti facility, located approximately 190 miles (306 km) south of New Orleans in around 4,100 feet (1,250 m) of water, Chevron started injecting water into its first deepwater Gulf producer-to-injector conversion wells. The project included installation of a new water injection manifold and 20,000 feet of flexible water injection flowline.
Bolstered by multiple development projects since the start of operations in 2009, the Tahiti facility recently surpassed 500 million gross barrels of oil-equivalent cumulative production. The company continues to study advanced drilling, completion, and production technologies that could be employed in future development phases at Tahiti and Jack/St. Malo with the potential to further increase recovery from these fields.
Chevron, through its subsidiary Union Oil Company of California, is operator of the St. Malo field and, together with its subsidiary Chevron USA. Inc., holds a 51% working interest. Co-owners MP Gulf of Mexico, LLC owns a 25% interest; Equinor Gulf of Mexico LLC, 21.5%; Exxon Mobil Corporation, 1.25%; and Eni Petroleum US LLC, 1.25%.
Chevron USA Inc. is operator of the Tahiti facility with a 58% working interest. Co-owners Equinor Gulf of Mexico LLC and TotalEnergies E&P USA, Inc. hold 25% and 17% stakes, respectively.
(Bloomberg) -- The Russian government’s revenues from taxes on oil and gas surged by a fifth in August from a year ago following soaring prices of the nation’s crude and higher gas flows to foreign markets.
Listen to the Here’s Why podcast on Apple, Spotify or anywhere you listen.
The levies brought in 778.6 billion rubles ($8.7 billion) last month, up by 21% from a year ago, the Finance Ministry said Wednesday. Taxes on crude and petroleum products accounted for almost 80% of total hydrocarbon revenues, according to Bloomberg calculations based on the data. The August budget revenues reflect prices, production and exports levels for July.
Oil and gas are key contributors to the nation’s coffers, under pressure from Western sanctions and the growing military cost of the Kremlin’s invasion of Ukraine. In the first seven months of the year, both industries accounted for over a third of Russia’s budget revenues.
The Russian oil industry has benefited from surging prices for Urals crude, the key export blend. August oil taxes were calculated based on a Urals price of $74.01. a barrel, up from $64.21 a year earlier.
Discounts on Russia’s crude to the Brent benchmark narrowed by over a third from a year ago, as its producers adapted to international sanctions, including the Group of Seven price cap and a European ban on Russian crude, by finding new buyers for its barrels and deploying a massive shadow fleet.
Tax proceeds from the oil industry would have been even higher in August without state subsidies to refiners. They received 163.3 billion rubles from the budget for domestic sales of gasoline and diesel, the ministry’s data show. The payments are partial compensation to account for the difference between car fuel prices in the domestic and foreign markets.
Month on month, oil revenue shrank by almost 42%, Bloomberg calculations show. That’s because one of Russia’s key oil taxes — a profit-based levy — is paid four times a year, in March, April, July and October.
Rebound in Gas Flows
August taxes from the gas industry alone jumped more than 24% year on year, to almost 163 billion rubles, spurred by Gazprom PJSC’s rebounding exports and robust domestic demand.
Daily deliveries to China via the Power of Siberia gas link in July set a historic record and repeatedly exceeded contractual obligations, according to the Russian producer, which did not provide any specific figures. Gas exports to the Asian nation rose by almost 33% from a year ago to 2.8 billion cubic meters, according to Bloomberg calculations.
Pipeline gas flows to Europe, which still continue via Ukraine and Turkey, climbed by almost 6% to 2.67 billion cubic meters, according to the calculations.
©2024 Bloomberg L.P.
Dutch and British wholesale gas prices slipped on Tuesday morning as high gas storage levels and imports of liquefied natural gas (LNG) helped to offset lower supply from Norway during its maintenance season.
The benchmark front-month contract at the Dutch TTF hub was down 0.62 euros at 37.88 euros per megawatt hour (MWh), or $12.27/mmBtu, by 0812 GMT, LSEG data showed.
The Dutch day-ahead TRNLTTFD1 contract was down 0.73 euros at 37.90 euros/Mwh.
In the British market, the day-ahead contract was down 0.95 pence at 91.65 pence per therm.
“We are now in the week with highest maintenance impact on the Norwegian Continental Shelf this summer. Total Norwegian export nominations have fallen by another 15 million cubic metres/day (mcm/d) to 173 mcm/d,” LSEG analyst Ulrich Weber said in a daily market note.
Europe’s gas storage sites, however, are 92.4% full, latest data from Gas Infrastructure Europe showed, having already hit a Nov. 1 target of being 90% full.
“Despite this sharp drop in Norwegian supply, EU gas stocks continue to fill up well … This is probably explained by the resilience of Europe LNG imports,” Engie EnergyScan analysts said in a daily research note.
Supply of Russian gas to Europe via Ukraine also remains stable.
Russian gas producer Gazprom GAZP.MM said it would send 42.4 million cubic metres (mcm) of gas to Europe via Ukraine on Tuesday, roughly the same volume as on Monday.
In the European carbon market, the benchmark contract CFI2Zc1 fell by 0.74 euros to 69.69 euros a metric ton.
Source: Reuters (Reporting by Marwa Rashad, Editing by Susanna Twidale and David Goodman)
NEW YORK (Reuters) - U.S. oil and gas producers' appetite for dealmaking is closing in on last year's record, with rising interest in smaller oilfields offsetting slower activity in the top oil-producing Permian basin, analysts at consultancy firm Rystad said on Wednesday.
Nearly $100 billion has been spent by U.S. producers on mergers and acquisitions (M&A) so far this year, and another $46 billion in assets are currently for sale, according to a Rystad analysis through late August.
A record $155 billion worth of production and exploration focused deals were signed in 2023, according to Rystad's tally.
Consolidation in the industry reached a fever pitch last year as top oil producers unveiled mega-deals to boost both their output and their backlog of drilling locations. For private owners, it has presented a rare window to exit investments profitably.
"Private equity-backed oil producers are likely to continue selling off assets to capitalize on public companies' appetite for inventory and secure premium valuations as competition among potential buyers increases," Raina said.
While last year's dealmaking rush focused almost exclusively on the Permian basin in Texas and New Mexico, intense competition for acreage in the top U.S. oilfield has sent opportunistic buyers to look elsewhere.
SM Energy, which is extending its footprint in the Uinta basin in Utah by acquiring XCL Resources for $2 billion, said good deals have become harder to find in the Permian.
"We would love to add that kind of asset in the Permian, but getting something of that size anywhere near that price is really hard right now," SM Energy Chief Financial Officer Wade Pursell said at a conference on Tuesday.
Deals focused on the Permian were just 46% of the first half total this year, versus 92% in the second-half last year, according to Rystad's analysis.
Deals in the Bakken basin of North Dakota grew to 12% in the first-half this year, from virtually none in the second half last year. The Marcellus basin in Pennsylvania made up 14% of the deals in the first half this year, while the Eagle Ford basin in Southeast Texas represented 13%, according to Rystad data.
(Reporting by Shariq Khan in New York; Editing by Marguerita Choy)
By Shariq Khan
(Bloomberg) -- Targa Resources Corp. rebuffed informal takeover interest from larger rival Williams Cos. in recent months, people with knowledge of the matter said, in another signal of the sustained appetite for consolidation in the pipeline industry.
The Houston-based natural gas pipeline operator viewed the overture from Williams as undervaluing the company, according to the people, who asked not to be identified discussing confidential information.
Williams is still discussing the feasibility of a transaction, the people said. There are no formal talks currently and it remains unclear whether the company will decide to pursue a deal, they said.
A spokesperson for Tulsa, Oklahoma-based Williams said the company has not approached Targa about a potential deal and is not engaged in any discussions about doing so. A representative for Targa declined to comment.
Williams’ shares were down about 2% at 10:28 a.m. in New York on Wednesday, giving the company a market value of roughly $54 billion. Targa’s stock was also down 2%, giving it a market capitalization of $32 billion.
At that size, any takeover of Targa would top Diamondback Energy Inc.’s $26 billion acquisition of fellow Permian Basin driller Endeavor Energy Resources LP — currently the biggest energy transaction of 2024.
Deal Pipelines
The oil and gas sector has been a major driver of mergers and acquisitions activity this year. While this has largely been due to a wave of consolidation among US oil explorers seeking to secure future drilling sites in the Permian Basin, gas pipeline operators have also been striking deals.
Building oil and gas pipelines in the US is difficult, as a result of legal challenges from environmental groups, political opposition in Democratic states and a glacial federal permitting process. Dealmaking in the sector has been mostly small-scale, though there are signs things are changing.
Last month, US pipeline operator ONEOK Inc. agreed to buy Global Infrastructure Partners’ entire interest in EnLink Midstream LLC and also GIP’s equity interests in Medallion Midstream, the largest closely held crude gathering and transportation system in the Permian Basin. The deals were valued at a combined $5.9 billion.
Other big players in the gas pipelines sector include Energy Transfer LP, Kinder Morgan Inc. and Phillips 66.
Targa has been targeted before. In 2014, the company called off a sale to Energy Transfer Equity LP after news of the potential $15 billion deal sent Targa’s shares surging, making its board question whether the offer was high enough, people familiar with the matter said at the time.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
https://finance.yahoo.com/news/targa-resources-rebuffed-takeover-interest-131015713.html
Korea Zinc will start developing technology to manufacture eco-friendly "high-purity nickel sulfate" in cooperation with domestic and foreign industries, academia, and research. If the process is successful, it is expected to respond to carbon regulations in major foreign countries such as the United States and the European Union.
Korea Zinc announced on the 4th that it will carry out projects with 10 industry-academic institutions after being selected as the organizer of the "2024 Material Parts Technology Development Project" ordered by the government. Along with Korea Zinc, research institutes such as the Korea Institute of Geoscience (KIGAM), the Pohang Institute of Industrial Science (RIST), and the Korea Institute of Production Technology (KITECH) and Kangwon National University and Savitchem will participate in this project.
If the government supports 18.3 billion won in R&D expenses and includes the investment paid by the institution, the total amount of R&D amounts to 24 billion won. The deadline for the study is December 2028.
High-purity nickel sulfate is a key material for secondary batteries that are increasingly in demand worldwide. Through this project, we plan to secure nickel raw materials using hydrogen reduction technology from high-quality nickel raw light "Saprolite", which was not used before, and to secure eco-friendly technology to extract high-purity nickel sulfate for secondary batteries from hydrogen reduction nickel.
It will also develop a recycling process to make high-purity nickel sulfate using circulating resources such as nickel-containing plating sludge, mixed wastewater sludge, and by-products generated during secondary battery manufacturing and recycling.
"The goal is to derive a carbon emission reduction process in the nickel smelting sector, which generates a lot of carbon dioxide," said an official at Korea Zinc Technology Research Institute. "We will actively respond to overseas carbon regulations and contribute to the circular economy by implementing ESG (environmental, responsibility, and transparent management) based on resource circulation."
Exxon Mobil Corporation XOM shares are trading lower today. The company inked a deal with Abu Dhabi National Oil Company (ADNOC), under which ADNOC will acquire a 35% equity stake in Exxon Mobil's proposed low-carbon hydrogen and ammonia production facility in Baytown, Texas.
The agreement marks the company’s significant investment in U.S. energy production and the global energy transition. The final investment decision is anticipated in 2025, with startup projected for 2029.
The facility is expected to become the world's largest of its kind upon startup, subject to supportive government policy and regulatory approvals.
It aims to produce up to 1 billion cubic feet of low-carbon hydrogen daily, with about 98% of CO2 removed, and over 1 million tons of low-carbon ammonia annually.
The company aims to reduce greenhouse gas emissions in hard-to-decarbonize sectors, meet rising demand for lower-carbon fuels, and advance the goal of achieving net-zero emissions.
Darren Woods, ExxonMobil Chairman and CEO, said, “This is a world-scale project in a new global energy value chain. Bringing on the right partners is key to accelerating market development, and we’re pleased to add ADNOC’s proven experience and global market insights to our Baytown facility.”
Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, stated, “This strategic investment is a significant step for ADNOC as we grow our portfolio of lower-carbon energy sources and deliver on our international growth strategy.”
“We look forward to partnering with ExxonMobil on this low carbon-intensity and technologically advanced project to meet rising demand and help decarbonize heavy-emitting sectors.”
Last month, Exxon Mobil reportedly planned to sell conventional oil assets in the Permian Basin, which could be valued at $1 billion.
Investors can gain exposure to the XOM via Energy Select Sector SPDR Fund XLE and IShares U.S. Energy ETF IYE.
Price Action: XOM shares are down 0.54% at $114.84 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
India's Union Ministry of Heavy Industries announced Reliance Industries Ltd (RIL) as successful bidder for incentives under the Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage.
RIL has been awarded 10 GWh ACC capacity under PLI scheme after topping rankings in the Quality & Cost Based Selection (QCBS) process.
MHI had received bids from seven companies under the global tender which offered maximum budgetary outlay of ₹3,620 crore --- ACME Cleantech Solutions, Amara Raja Advanced Cell Technologies, Anvi Power Industries, JSW Neo Energy, Lucas TVS, Reliance Industries, and Waaree Energies. Each had bid for 10 GWh capacity, for a cumulative bid of 70 GWh capacity.
After evaluating the bids, MHI shortlisted six bidders for financial evaluation as per the requirements under the RFP. Financial bids were opened on August 2 and final evaluation was carried out as per the QCBS mechanism.
The process resulted in bidders being ranked based on their combined technical and financial scores, and MHI awarded the 10 GWh PLI-ACC capacity to the shortlisted bidder with highest overall score, in this case RIL.
The remaining five bidders have been put on a waiting list as per their final ranking, revealed as ACME Cleantech Solutions first, followed by Amara Raja Advanced Cell Technologies, Waaree Energies, JSW Neo Energy and Lucas TVS Ltd.
In a press release, MHI called the initiative "another step towards enhancing domestic manufacturing capacity, reducing import dependence, and positioning India as a global leader in ACC battery manufacturing."
India launched its technology-agnostic PLI scheme in May 2021 for achieving manufacturing capacity of 50 GWh of ACC with an outlay of ₹18,100 crore.
The first round of the ACC PLI bidding was concluded in March 2022, and three beneficiary firms were allocated a combined capacity of 30 GWh.
Copper prices plunged to their lowest in more than two weeks as weak economic data in the world’s biggest metals consumer China raised demand concerns.
MCX Copper prices were trading 0.2% lower at ₹783.80 per kg and hit a low of ₹780.90 during the session, tracing three-month copper on the London Metal Exchange (LME) that dropped 2% to $8,996.50 a metric ton, its weakest since August 15. US Comex copper futures slid 2.9% to $4.05 a lb.
The drop in copper prices is largely attributed to weak economic data from China, particularly in the manufacturing and property sectors, which has heightened concerns about reduced demand for the red metal.
China’s manufacturing activity fell to a six-month low in August, while the growth in new home prices has slowed, data showed, further dampening copper demand from these key sectors.
“China’s ongoing property sector crisis is dampening copper demand. The strengthening of the US dollar, which reached a two-week high, has exerted additional downward pressure on copper prices. Copper inventories have increased at LME-monitored warehouses, adding to market pressure. Copper is trading below its 200-day moving average, indicating further downside risk. Market sentiment remains cautious due to weak global demand and strong dollar influence,” said Ajay Kedia, Director of Kedia Advisory.
Moreover, Goldman Sachs cut its 2025 copper price forecast sharply on Monday, projecting an average price of $10,100 a ton, down from its previous forecast of $15,000, Reuters reported.
Outlook for Copper Kedia believes while the outlook remains cautious for copper, further downside seems to be restricted as potential stimulus measures from China and interest rate cuts by the US Federal Reserve could provide some support.
According to him, the seasonality factor can also support copper prices going ahead as the months of September, October and November are generally positive for the red metal.
“LME copper prices may get support at $8,700 level, while resistance is placed at $9,300 level. MCX copper prices are likely to find support near ₹768 - 770 levels. On the upside, if price breaches ₹812 level, it may rise to ₹828 - 830 levels,” said Kedia.
(With inputs from Reuters)
Augustus Minerals AAUG has received high-grade copper and silver rock chip assays from field work over a strike length of more than a kilometre at the company’s 3,600 sq km Ti-Tree project in the Gascoyne region of Western Australia. A new “Nero” zone at Ti-Tree has returned copper grades up to 3.1% from the 24 rock chips collected, with five of the samples assaying approximately 1%. Along with the elevated copper assays, Nero returned up to 11g/t silver and 0.10g/t gold. Mapping program The new mineralised zone discovery was made during a program of mapping conducted by Augustus 3.7km along strike north-east of the Claudius prospect, where the company has received previous results of 6.6% copper and 86 parts per million silver. Augustus has now identified mineralised north-east-trending structures Claudius, Nero and Tiberius at Ti-Tree and is on the search for more in the area. The Tiberius prospect, located 8km to the north, has so far returned 236g/t silver, 35% copper and 20.5% lead. Drilling plans The current mapping and field work program continues to search for suitable drilling platforms to be included in the next stage of exploration. Augustus is preparing for deep diamond drilling in the September-October period at the Minnie Springs copper-molybdenum porphyry prospects to test the core of the system for high-grade copper sulphide mineralisation. The company is also awaiting results from an airborne versatile time domain electromagnetic survey flown over three areas within Ti-Tree in August, designed to test several quality targets with potential for copper-nickel-platinum group elements and zinc-lead-silver massive sulphide mineralisation, along with uranium. The survey results are expected in mid-September.
The plant will be the fifth in the world in terms of concentrate production volume with a 4.5% share of global concentrate output.
Sanctions imposed in 2023 on Ozernoye’s owner, metals magnate Vladislav Sviblov, and his companies by Washington and London complicated the search to replace Western equipment that was destroyed in the fire.
The company said on Wednesday that it had relied on domestic technology to replace the equipment.
“The launch of the Ozernoye plant contributes to ensuring the economic sovereignty of the state,” deputy prime minister Yuri Trutnev said at the opening ceremony.
The launch of Ozernoye is expected to help ease tight global supply of zinc concentrate that is being felt in top consumer China this year, with global mine production heading for a third consecutive year of decline.
Despite tight supply of the raw material, the global refined zinc market is currently in surplus. Zinc is used to galvanize steel with the construction sector being the main market.
Analysts at Macquarie expect the global surplus of refined zinc to grow in 2025 as both mine supply and smelter production increase.
Ozernoye said that demand for its concentrate from buyers in the Asia region was sufficient.
“Countries in the Asia-Pacific region are strategic markets for our products. The capacity of these markets is sufficient for product sales. There is interest in the concentrate from major buyers,” a company representative said.
He did not specify which other markets, apart from China, it was targeting. Russia’s trade with China has been hampered by payment delays as Chinese banks tightened their compliance for fear of secondary Western sanctions.
Russian domestic demand for zinc has also been growing, as the metal is widely used in the military industry, which is ramping up production to meet the army’s needs for what Russia calls its “special military operation” in Ukraine.
Chelyabinsk Zinc Plant in the Urals, the only producer of the metal in Russia, has been quickly increasing its output after a decline in recent years following reconstruction work, which added 15% to its capacity.
Another smelter, the New Verkhny Ufaley, is expected to start production in 2025 with a projected annual output of 120,000 tons. By 2027, Russia will be able to produce 322,000 tons of refined zinc annually, up from last year’s 205,000, consultancy CRU said.
(By Anastasia Lyrchikova, Polina Devitt and Gleb Bryanski; Editing by Andrew Osborn and Mark Heinrich)
(Alliance News) - The following stocks are the leading risers and fallers on AIM on Wednesday.
----------
AIM - WINNERS
----------
Rockfire Resources PLC, up 33% at 0.24 pence, 12-month range 0.10p-0.40p. The Greece and Australia-focused gold, base metal and critical mineral exploration company's shares jumped, after announcing a six-fold mineral resource upgrade at Molaoi. Located in Greece, Molaoi is a zinc, silver, and lead deposit. The inferred resource estimate is now 15.0 million tonnes at 7.3% zinc, 1.8% lead, and 39.5 grams per tonne of silver. This compares to a maiden resource estimate from May 2022 of 2.3 million tonnes at 11% zinc equivalent, for 250,000 tonnes of zinc equivalent. Rockfire Resources said that the new resource has "surpassed all expectations", and places Molaoi "within the top 20 undeveloped zinc resources globally in terms of tonnage, grade and zinc equivalent metal content".
----------
By Holly Beveridge, Alliance News senior reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Import offers for hot rolled coil from Asia into Italy have decreased by approximately €40/tonne ($44.1) compared to the beginning of last month. However, purchasing interest remains low, Kallanish notes.
HRC offers from Asian suppliers in Italy range from €560-570/t cfr, but Japan and some other countries are not currently offering. Local buyers are not in the mood to purchase from origins that have exhausted their EU quotas and have long lead times. India is reported offering faster delivery times and quoting the lowest price in the range.
European coil prices are experiencing a decline as a result of low consumption in most end-user sectors, such as automotive and white goods. Prices are currently at around €600/t base ex-works, but €590/t is also available.
Nevertheless, the domestic market has not yet resumed sales and purchasing activity following the summer break. The majority of re-rollers and service centres have adopted a wait-and-see approach. According to two local sources, they have no intention of purchasing this week. Rumours are circulating regarding Turkish coil being offered at an exceptionally low price in Italy.
One service centre anticipates that activity will recommence within the next few days. Sales volumes are anticipated to be "acceptable" in September; however, service centre customers report a 20-25% decrease in activity compared to last year.
European mills are either not providing quotes or are offering at €600-610/t base ex-works. They should now be starting to offer material with October delivery. Italian market participants anticipate HRC contract levels will reach €570/t base ex-works this month.
In January-July, French steelmakers increased steel output by 3.9% y/y
Steel enterprises of France at the end of July 2024 year reduced steel production by 8.8% compared to the same month 2023 year – to 750 thousand tons. Thus, the country took 19th place in the global ranking of steel producing countries (71) WorldSteel Association.
Compared to the previous month, steel production by French steelmakers increased by 3% in July. Thus, the indicator recovered slightly after declining in June to the lowest since December 2023.
In January-July, steel production in France increased by 3.9% compared to the same period in 2023 – up to 5.91 million tons. The average monthly steel production for this period amounted to 843.86 thousand tons, compared to 811.86 thousand tons in January-July 2023.
In general, steel production in the EU countries in January-July 2024 increased by 1.5% compared to January-July 2023 – up to 78 million tons. Global steel output for 7 months amounted to 1.11 billion tons, which is 0.7% less compared to the same period last year.
In 2023, France reduced steel production by 17.4% compared to 2022 – to 10.01 million tons. The average monthly steel production for the year amounted to 840.7 thousand tons, while in 2022 the indicator was at the level of 1.01 million tons (-16.76% y/y).
In 2023, steel production in the EU countries amounted to 126.3 million tons of steel, which is 7.4% less than y/y.
France has 10 steel plants, including Saarstahl Ascoval Saint-Saulve (capacity 730 thousand tons of steel per year), LME Trith-Saint-Léger (850 thousand tons/year), ArcelorMittal Dunkerque (6.75 million tons/year), Kehler Baden Steel Works (2.5 million tons/year), Riva Sam Neuves-Maisons (850 thousand tons/year), Riva Iton Seine Bonnieres Sur Seine (550 kta), Riva Alpa Gargenville (700 kta), Riva Sam Montereau (720 thousand tons/year), ArcelorMittal Méditerranée Fos sur Mer (4 million tons/year), Celsa France Boucau (1.2 million tons/year). The total capacity of steel plants reaches 18.85 million tons/year. Consequently, in 2023, capacity utilization was at 53.1%.
https://gmk.center/en/news/france-in-july-reduced-steel-smelting-by-8-8-y-y/
Meanwhile, the most actively traded January iron ore contract on the Dalian Commodity Exchange in China dropped 3.09% to 689.5 yuan ($96.95) per metric ton, its weakest level since August 22, 2023.
“Iron ore supply will most likely continue to rise no matter what,” said Chen Guanyin, an analyst at Mysteel Global.
“So, whether iron ore drops further will largely depend on whether demand for steel products sees a substantial rebound from the seasonal lull.”
This latest downturn comes after a brief rebound above $100 a ton last week. The decline is partly driven by a slowdown in China’s services sector activity in August, even during the peak summer travel season, according to a private-sector survey released Wednesday.
“Last week’s blindly optimistic and irrational sentiment rally is now being rationally unwound, as the market once again comes to terms with the realization of terrible downstream steel demand-side fundamentals in China”, said Atilla Widnell, managing director at Navigate Commodities.
“Despite numerous policies aimed at stemming the downturn in house prices and corresponding losses in wealth, it looks like the market has made its peace that these measures will not directly or immediately contribute to healthier construction activity and associated steel consumption,” Widnell added.
The data comes on the back of slowing growth in China’s new home prices, as its crisis-hit property sector struggles to find its bottom.
Immediate challenges facing China’s steel sector also include the domestic business environment, a rise in protectionism globally and local policies, said ANZ analysts in a note.
The ongoing crisis in the steel industry has led China’s largest mills to warn that the sector must adapt to a new reality of declining demand.
“Demand for steel in China, the world’s biggest producer, appears set to slip,” Bloomberg Intelligence analysts Richard Bourke and Grant Sporre wrote in a note.
(With files from Reuters and Bloomberg)
https://www.mining.com/iron-ore-price-slides-closer-to-90-on-weak-chinese-steel-outlook/
U.S. exports of thermal coal to Asia and Africa surged in the first half of 2024, helping to drive overall U.S. coal exports (thermal and metallurgical) to 53 million short tons (MMst) from 49 MMst in the first half of 2023.
Exports of thermal coal from the United States to Asia increased by 19% (2.3 MMst) in the first half of 2024 compared with the same period in 2023. The increase was driven mainly by greater deliveries to India and China. India accounted for 57% of these exports to Asia in 2023 and continued to receive large amounts of U.S. thermal coal in the first half of 2024, led by industrial customers in the brickmaking sector. Chinese power companies accounted for most of the rest of the increase.
Thermal coal is generally burned to generate steam for the production of electricity, while metallurgical coal is a raw material used to generate coke, a key ingredient in making steel.
Asia has received more U.S. thermal coal than any other region since 2017, when it overtook Europe, which previously had been the top destination in every year since 2009.
Exports of thermal coal from the United States to Africa increased 60%, from 3.3 MMst in the first six months of 2023 to 5.3 MMst in the same period of 2024. Going back to 2000, U.S. exporters have never shipped more than 5 MMst of thermal coal to Africa during the first six months of the year, and U.S. thermal coal exports to Africa have only exceeded 4 MMst once, in 2019. In the first half of 2024, U.S. exporters shipped virtually all (98%) of this thermal coal to Egypt and Morocco. In the first six months of 2024, exporters shipped 2.8 MMst to Morocco and 2.4 MMst to Egypt, compared with 1.4 MMst and 1.8 MMst, respectively, in the same months of 2023. A major reason for increased exports of U.S. thermal coal into North Africa has been strong demand by industry, mostly from cement plants and brickmakers. These customers value the high heat content of U.S. thermal coal, which makes their manufacturing operations more efficient.
U.S. thermal coal exports to Europe rose in 2022 and in the first half of 2023 due to sanctions on the purchase of energy from Russia following Russia’s full-scale invasion of Ukraine. Exports from the United States to Europe increased from 6.4 MMst in 2021 to 14 MMst in 2022, when sanctions on Russia took effect. U.S. exports to Europe totaled 10.5 MMst in 2023; however, that resurgence has faded. In the first half of 2024, U.S. thermal coal exports to Europe totaled 2.4 MMst, 63% less than during the same period in 2023 due to weak demand related to a mild winter, greater use of natural gas by power companies, and increased generation from renewable sources.
Principal contributor: Jonathan Church
Union Steel Minister H D Kumaraswamy on Wednesday, September 4, announced his intention to push for an increase in import duties on steel to counter the dumping of cheap steel from China.
Speaking at the Fifth Steel Conclave organised by the Indian Steel Association, Kumaraswamy said he would engage with the finance ministry to raise import duties from the current 7.5% to 10-12%.
Expressing concern over the impact of Chinese steel imports, the minister noted that several industry players have recently approached him to discuss the challenges posed by the influx of low-priced steel. "The problem which you are facing from China... I will try to convince the finance ministry to look at raising the duty on steel imports from 7.5% to 10-12%," he stated.
Kumaraswamy also highlighted the need to remain vigilant against global challenges, particularly the slowdown in demand resulting from economic issues in China.
He emphasised the steel ministry's commitment to the vision of Aatmanirbhar Bharat and asserted that the Indian steel industry is on the brink of reaching new heights despite these challenges.Naveen Jindal, Chairman of Jindal Steel and Power Limited (JSPL), echoed the minister's concerns during the event.
Jindal pointed out the surge in steel imports from countries like China, Korea, and Vietnam, which have increased by 50-80% compared to last year.
He called for immediate action to protect the domestic industry, stating, "We have written to the Finance Minister and Steel Minister about this... It is fiercely competitive market, prices are lower than anywhere in the world, but the imports are coming in at predatory prices."
Jindal further emphasised the importance of safeguarding the industry, adding, "Steel demand is only going to increase in India, and there is huge potential for growth, but we need to ensure that the industry is protected from unfair competition."
He also suggested that the current import duty may not be sufficient, saying, "I don't think 10-12% import duty will be enough; the prices of the steel being dumped are too low."
Kumaraswamy concluded by underscoring the steel ministry's commitment to ensuring the growth of the Indian steel industry, particularly as it plays a crucial role in the country's journey towards Aatmanirbhar Bharat.
