Anglo American Platinum First Half 2024 Results
Key Financial Results
- Revenue: R52.2b (down 19% from 1H 2023).
- Net income: R6.32b (down 18% from 1H 2023).
- Profit margin: 12% (in line with 1H 2023).
- EPS: R24.03 (down from R29.39 in 1H 2023).
Anglo American Platinum Earnings Insights
Looking ahead, revenue is forecast to grow 1.3% p.a. on average during the next 3 years, compared to a 7.0% growth forecast for the Metals and Mining industry in South Africa.
The company's share price is broadly unchanged from a week ago.
By Clyde Russell
LAUNCESTON, Australia- China’s first cut to major short- and long-term interest rates in 11 months drew a distinctly ho-hum reaction from the commodities that usually would be expected to be the biggest beneficiaries.
The People’s Bank of China said on Monday it would cut the seven-day reverse repo rate to 1.7 percent from 1.8 percent , and minutes after that announcement benchmark lending rates were lowered by the same margin at the monthly fixing.
But the first broad reduction in interest rates since last August sparked little buying interest in iron ore and copper, the two commodities viewed as having the biggest exposure to the major parts of China’s economy, namely construction and manufacturing.
Benchmark iron ore futures on the Singapore Exchange dipped 0.4 percent to end at $106.79 a metric ton, while China’s main domestic contract on the Dalian Commodity Exchange ended daytime trade 0.3 percent lower at 798.5 yuan ($109.79) a ton.
London-traded copper futures closed down 1.0 percent at $9,216.50 a ton, the weakest finish since April 8, while Shanghai copper contracts ended at 76,220 yuan, down 0.86 percent and also the lowest close since April 8.
The lacklustre price response to the interest rate cuts follows the prevailing view that China’s policymakers aren’t really pulling out all the stops to boost the world’s second-biggest economy.
The twice a decade political event known as the plenum, held last week failed to inspire confidence that Beijing is on track to lift flagging economic growth by sparking a recovery in the residential property sector.
The risk that Donald Trump wins the US presidential election in November and delivers on his promise to increase trade tariffs on China and others is also leading market watchers to be cautious about China’s economic prospects.
However, the worries over China are largely limited to sentiment where commodities are concerned, with both iron ore and copper showing trade patterns more related to pricing dynamics.
China’s iron ore imports are expected to remain robust in July, with commodity analysts Kpler tracking arrivals of around 111 million tons.
If the customs number comes in close to the Kpler estimate, it would represent a strong gain on the official 97.61 million tons reported in June.
China’s iron ore imports have been fairly strong so far this year, with customs data showing arrivals of 611.18 million tons in the first half, up 35.05 million, or 6.2 percent from the same period in 2023.
But much of the increase has ended up going toward rebuilding stockpiles, with port inventories monitored by consultants SteelHome rising 35.1 million tons since the end of last year to 149.6 million in the week to July 24.
https://malaya.com.ph/news_business/chinas-interest-rate-cuts-fail-to-revive-prices-of-commodities/
No Free Money:
• Retailers made record profits in FY24 after suffering losses in FY23
• Retailers resisted daily price changes citing volatility
• Retailers say they need to recoup losses from keeping prices low in FY23
• IOC profit jumped from Rs 8,241 crore in FY23 to Rs 39,618 crore in FY24
New Delhi: The government has scrapped the Rs 30,000 crore equity infusion it had planned in state-owned fuel retailers after they made record profits in the fiscal year ended March 31, according to the Budget Finance Minister Nirmala Sitharaman presented on Tuesday.
Sitharaman had on February 1 last year, while presenting the annual Budget for the 2023-24 fiscal (April 2023 to March 2024), announced an equity infusion of Rs 30,000 crore in Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) to support the three state-owned firm’s energy transition plans.
Alongside, she had also proposed Rs 5,000 crore for buying crude oil to fill strategic underground storages at Mangalore in Karnataka and Visakhapatnam in Andhra Pradesh that India has built to guard against any supply disruptions.
In the interim budget, the finance minister presented in February this year ahead of the general elections, the capital support to the three oil companies was halved to Rs 15,000 crore and the plan for filling strategic underground storage was deferred. In the full budget for 2024-25, both plans have been scrapped.
The budget documents showed nil allocation for capital support to the three oil marketing companies (OMCs) in 2024-25 against Rs 30,000 crore that was provisioned in the 2023-24 budget. While the interim budget in February this year showed the amount against this entry at Rs 15,000 crore, the revised allocation in the full budget presented today showed Rs 0.01 crore as the expenditure for 2023-24 and nil in the 2024-25 budget provision.
While other state-owned oil companies like Oil and Natural Gas Corporation (ONGC) and GAIL (India) Ltd too have lined up billions of dollars of investment to achieve net-zero carbon emissions, the equity support was limited to the three fuel retailers, which had suffered huge losses in 2022 when they held retail petrol, diesel and cooking gas (LPG) prices despite a spike in raw material (crude oil) prices, following Russia’s invasion of Ukraine.
But with three retailers IOC, BPCL and HPCL reporting record profits totalling about Rs 81,000 crore in FY24 (2023-24), which is far more than their annual earnings of Rs 39,356 crore in pre-oil crisis years, the capital support has gone.
The retailers have resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile - rising on one day and falling on the other - and that they needed to recoup losses incurred in the year, when they kept rates lower than cost.
NEW DELHI: Reliance Industries has received approval from the United States to resume importing oil from Venezuela despite Washington's sanctions, a source familiar with the matter said on Wednesday.
The United States in April re-imposed sanctions on Venezuela's oil sector in response to President Nicolas Maduro's failure to meet his election commitments, but said some firms would be authorised to trade and operate in Venezuela.
The US Treasury Department and Reliance did not immediately respond to a request seeking comment. The news was first reported by Bloomberg.
Before US oil sanctions were first imposed on Venezuela in 2019, Reliance was the second-largest individual buyer of Venezuelan crude after China's CNPC.
Reliance had re-submitted a request to the US in May for authorisation to import crude oil from Venezuela, after the US Treasury Department refused to grant licences to Indian refiners including Reliance following the easing of sanctions in October.
Refiners, however, resumed Venezuelan oil purchases through intermediaries, until the sanctions kicked in again in June.
Oil and Natural Gas Corp has also sought a waiver from the US Office of Foreign Assets Control to lift crude oil from Venezuela, an industry source said.
GEORGETOWN, Guyana (AP) — A fifth major offshore oil field being developed by a consortium led by ExxonMobil at an estimated cost of $12.7 billion will add another 1.3 billion barrels of recoverable oil reserves to the 10-billion barrel Guyana-Suriname basin, the Guyanese government said Tuesday.
The Uaru-Mako project currently under review could come on stream in the next three years, adding add as many as 63 more wells to the 30 already drilled in the Stabroek Block by the consortium, which also includes Hess Corporation and China's CNOOC.
With two fields in production and two more approved, the consortium is the first among many multinational entities seeking to exploit the massive basin, which promises to transform two small South American nations into some of the world’s largest fossil-fuel producers.
Guyana’s Environmental Protection Agency released the oil field's specifications on Tuesday for public review, saying that Uaru-Mako has at least 1.3 billion barrels of sweet, light crude to add to the more than 10 billion barrels in recoverable reserves the consortium has estimated so far.
Current production from the first two fields is nearly 400,000 barrels per day. The agency required the consortium to take out insurance to cover the costs of any potential oil spills in those fields.
Exxon has said that once it's approved by the local EPA and a final investment decision is made, a fifth giant floating production storage and offloading vessel (FPSO) will be brought in to fill tankers for international markets. The consortium’s licenses cover stretches of the Caribbean located about 120 miles (193 kilometers) offshore in an area near Guyana's maritime border with Suriname.
The announcement about a fifth major oil field comes amid calls from opposition parties and rights groups for Guyana to get a better deal.
The consortium is paying the up-front development costs, and will recover 75% when revenues roll in. ExxonMobil will receive additional revenues equivalent to another 12.5% of the cost. Guyana will collect the final 12.5% — roughly $1.6 billion — as well as a 2% royalty on any revenues thereafter.
Guyana earned more than $1 billion last year from its portion of the production sharing agreement with the consortium, but that's well below industry norms. The International Monetary Fund, among other outside observers, has urged the government to seek better deals as the oil rush contributes to world-leading economic growth, increasing Guyana's GDP by nearly 60% in 2022.
Guyanese authorities have said they will not push to renegotiate the existing deal, but will demand better terms from any new licensees. Bidding by the industry's major global players will close in mid-April for 14 new blocks near the consortium’s Stabroek Block.
https://ca.news.yahoo.com/guyana-1-3-billion-barrels-193140800.html?src=rss
(Bloomberg) -- Russia’s first oil shipment of the year is traveling through the nation’s Northern Sea Route to China, with more vessels expected to follow suit.
The 2,500-mile shipping route, which traverses waters off the Siberian tundra, is typically only used during summer months when ice conditions are less severe. But Western sanctions and Houthi drone attacks in the Red Sea have boosted its appeal as the shortest passage between ports in Russia and China.
Last year, the waterway saw a record 36 million tons of cargo pass through, of which more than half was super-chilled liquefied natural gas, according to Rosatom, a Russian energy company that also operates the Northern Sea Route.
While journeys can still prove onerous, particularly if ships need icebreaker assistance, ongoing attacks by Yemen’s Houthis in the Red Sea have made the route a safer choice. More Russian tankers may opt to use the Northern Sea Route in a bid to avoid the violence and get their cargoes to buyers more quickly.
Shturman Ovtsyn is the first oil tanker to make use of the passage this year and is already over halfway through its journey. The voyage is unusual for this small tanker, which usually hauls cargoes from Gazprom Neft’s Arctic Gates terminal on the Ob Gulf to the port of Murmansk.
In late June it loaded a cargo as normal, but headed east instead of west when it entered the Kara Sea and is making its way to Rizhao, a Chinese port north of Shanghai, where, like many other Russian tankers, it may undergo maintenance as well as drop off its load.
Three tankers owned by Russian tanker group Sovcomflot are due to arrive in Murmansk before the end of the month. The NS Arctic and SCF Baltica both traversed the NSR last year and, once loaded, it’s likely they will head to China via Russia’s northern coast. For the SCF Baikal, the NSR would be new territory.
Another two, also owned by Sovcomflot, are heading from China to the Bering Strait and will make the westward journey to Murmansk. The LNG-fueled tankers Korolev Prospect and Vernadsky Prospect are due to be delivered this year on a 10-year charter to the Sakhalin 2 project.
Before taking up their roles, both vessels need to be upgraded with a bow loading system and modification of their bunkering equipment. They may be headed to a Murmansk shipyard for that work and could then carry cargoes back to China before taking up their new jobs.
OSLO: Equinor 's second-quarter profits declined by 4% year on year as natural gas prices fell, the energy company reported on Wednesday, although the results still outperformed analysts' expectations.
The Norwegian oil and gas producer's adjusted earnings before tax for April-June eased to $7.48 billion from $7.80 billion a year earlier, beating the $6.96 billion predicted in a poll of 22 analysts compiled by Equinor. "Our operational performance continued to be strong through the quarter," CEO Anders Opedal said in a statement.
Compared to the same quarter last year, the realised European piped gas price decreased due to mild temperatures and lower market prices driven by high storage levels and reduced demand, Equinor said.
The Dutch TTF front-month gas contract, Europe's benchmark, averaged 31.76 euros per megawatt hour (MWh), or $10.02 per mmbtu, in the second quarter, down from 34.86 euros/MWh, or $11.13 per mmbtu a year earlier.
Equinor lowered its renewable energy production growth forecast for 2024 to 70% from a forecast doubling previously, amid a delay to the start-up of the 1.2 GW Dogger Bank A offshore wind farm in the UK to 2025 from late 2024.
The group maintained a projection that its oil and gas output would be unchanged in 2024 from 2023 and kept a forecast for capital expenditure of $13 billion this year.
Equinor in the second quarter pumped 2.05 million barrels of oil equivalent per day (mboed), slightly above expectations in the analyst poll for 2.03 mboed and up from 1.99 mboed a year ago.
The company in 2022 overtook Russia's Gazprom as Europe's biggest supplier of natural gas when Moscow's invasion of Ukraine upended decades-long energy ties.
Equinor's share price has declined by 10.4% so far this year, lagging a 1% rise in the wider index of major European energy stocks.
Bulgaria has offered to help Hungary manage the difficulties that have arisen after Ukraine's ban on the transit of oil from Russia's Lukoil, Peter Szijjarto, the minister of foreign affairs and trade, said in Bucharest on Wednesday.
Speaking after talks with Vladimir Malinov, Bulgaria’s minister for energy affairs, Szijjarto said they had reviewed the situation that had arisen due to Ukraine’s “unacceptable” move to render Lukoil’s crude oil transits to Hungary and Slovakia impossible.
“Not only are they endangering Hungary’s and Slovakia’s energy security by doing this, but they are also violating the association agreement between the European Union and Ukraine,” Szijjarto said, according to a ministry statement.
Meanwhile, he said the EU’s Trade Policy Committee set to discuss the issue had convened in Brussels on Wednesday.
“It’s clear that certain EU member states continue to represent a political stance, and despite the fact that the step taken by Ukraine obviously violates the security of Hungary and Slovakia’s energy supply as well as the EU-Ukraine association agreement, they’re trying to defend Ukraine and clearly don’t care about the European Union’s internal solidarity,” Szijjarto said.
“We’ll see when the European Commission formulates its position and convenes the consultation between the European Union and Ukraine, which we expect to result in Ukraine lifting the ban on Lukoil oil transits,” he added.
Szijjarto noted that a significant share of Hungary’s natural gas supply was delivered via Bulgaria, and that the country was among the most reliable in the region.
Hungary received 5.6 billion cubic metres of natural gas through Bulgaria last year and 3.9 billion so far this year, he said.
“Bulgaria respects all of its obligations as a transit country,” he said.
Szijjarto said his Bulgarian partner had offered to help Hungary in connection with the situation that has arisen after the Ukrainian ban.
“Though there’s no direct crude oil delivery link, i.e. pipeline between the two countries, he did say that if we needed further volumes of oil, they are capable of getting it to Hungary,” Szijjarto said. “Offering this kind of help is another nice and friendly gesture from Bulgaria.”
MOSCOW (Sputnik) - Hungary will only harden its position on blocking 6.5 billion euros ($7 billion) from the European Peace Facility as compensation to EU countries for supplying arms to Ukraine over Kiev stopping the transit of Russia's Lukoil oil, Slovak President Peter Pellegrini said on Wednesday.
Hungarian Foreign Minister Peter Szijjarto has said that Hungary and Slovakia had launched consultations between the European Commission and Ukraine due to the suspension of the transit of Russian oil. Szijjarto then said that Hungary would not approve the allocation of 6.5 billion euros for arms sent to Ukraine through the European Peace Facility until Kiev resolves the issue of oil transit.
"I think after Ukraine's reaction with regard to stopping Lukoil's oil transit, this strong position against allowing the disbursement of these funds will further strengthen and Hungary will continue to block them," Pellegrini told a press conference.
Pellegrini also said that Slovakia would like to receive the funds that are intended for it for the military equipment it transferred to Ukraine, but respected Hungary's position.
"Hungary is exposed to a really serious risk of shortage of raw materials and reacts appropriately due to this step from Ukraine," the president added.
Last week, Szijjarto said that Lukoil's oil supplies through Ukraine via the Druzhba oil pipeline had been stopped. The Slovak Economy Ministry confirmed that the republic had stopped receiving oil from Lukoil due to Ukraine stopping its transit through its territory. It noted that Lukoil had been sanctioned by Ukraine. Slovakia's Slovnaft refinery is supplied with Russian oil from another supplier, but the country is discussing the current situation with the Ukrainian side.
Crude oil prices ticked higher today after the U.S. Energy Information Administration reported an inventory decline of 3.7 million barrels for the week to July 19.
This compared with an inventory draw of 4.9 million barrels estimated by the EIA for the previous week. The American Petroleum Institute, meanwhile, on Tuesday estimated another inventory draw in crude oil for the week to July 19, at 3.9 million barrels.
In fuels, the EIA reported more draws.
Gasoline stocks shed 5.6 million barrels in the week to July 19, with production averaging 10.2 million barrels daily.
This compared with a build of 3.3 million barrels for the previous week, when production averaged 9.5 million barrels daily.
In middle distillates, the agency estimated an inventory decline of 2.8 million barrels for the week to July 19, with production averaging 4.9 million barrels daily.
This compared with an inventory build of 3.5 million barrels for the previous week, when production averaged 5.2 million barrels daily.
Oil prices, meanwhile, moved higher on Tuesday, following the American Petroleum Institute’s report and continuing wildfires in Canada’s oil heartland, Alberta. Some of the fires have forced oil producers to curb production, affecting prices positively, ING’s Warren Patterson and Ewa Manthey wrote in a note.
“Oil supply risks from wildfires in Canada continue to grow. While wildfires have already forced some producers to curtail production, these fires still threaten a large amount of supply,” they said.
The analysts noted lukewarm Chinese oil demand as a bearish factor but added that “the market is nearing oversold territory and we still believe that the fundamentals support prices moving higher from current levels over the remainder of the third quarter on the back of a deficit environment.”
At the time of writing, Brent crude was trading at $81.35 per barrel, with West Texas Intermediate changing hands at $77.37 per barrel, both up from opening.
https://oilprice.com/Energy/Crude-Oil/Oil-Moves-Higher-on-Crude-Fuel-Inventory-Draw.html
Spot premiums for Middle East crude benchmarks Oman, Dubai and Murban eased on Wednesday despite the flurry of activities on window that led to the delivery of another two cargoes to PetroChina.
ARBITRAGE
India's Reliance Industries RELIANCE1! has received approval from the United States to resume importing oil from Venezuela despite Washington's sanctions, a source familiar with the matter said on Wednesday.
Before U.S. oil sanctions were first imposed on Venezuela in 2019, Reliance was the second-largest individual buyer of Venezuelan crude after China's CNPC.
SINGAPORE CASH DEALS
Cash Dubai's premium to swaps fell 11 cents to $1.61 a barrel.
PetroChina will receive a September-loading Upper Zakum crude cargo from Reliance and a Murban cargo from BP following the deals.
SELLER-BUYER PRICE ($/BBL) BP-PETROCHINA 80.65 RELIANCE-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 EXXONMOBIL-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-SHELL 80.60 HENGLI-PETROCHINA 80.65 EXXONMOBIL-GUNVOR 80.55 VITOL-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 HENGLI-PETROCHINA 80.66 HENGLI-PETROCHINA 80.65 VITOL-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.66 EXXONMOBIL-SHELL 80.63 HENGLI-PETROCHINA 80.65 BP-PETROCHINA 80.65 EXXONMOBIL-SHELL 80.63 HENGLI-PETROCHINA 80.66 HENGLI-PETROCHINA 80.65 BP-PETROCHINA 80.65 BP-PETROCHINA 80.65 HENGLI-PETROCHINA 80.66 BP-PETROCHINA 80.65
PRICES ($/BBL)
CURRENT PREV SESSION DME OMAN 80.66 81.95 DME OMAN DIFF TO DUBAI 1.62 1.72 CASH DUBAI 80.65 81.95
NEWS
Indonesia, the world's biggest palm oil producer, is testing fuel with a view to increasing to 40% from 35% the share of palm-oil blended into biodiesel next year, the energy ministry said.
The Russian government is considering a ban on exports of diesel due to rising domestic prices, the Kommersant daily reported on Wednesday, citing several unnamed sources.
Ship owner Hafnia, operator of the Hafnia Nile oil tanker, is in discussion with Singapore's Maritime and Port Authority (MPA) about transferring the damaged ship's cargo of naphtha to a safe location, the MPA said on Wednesday.
Grains
OMAHA (DTN) -- December corn is up 1 cent per bushel, November soybeans are down 3 1/4 cents per bushel. September KC wheat is down 4 1/2 cents per bushel, September Chicago wheat is unchanged, and September Minneapolis wheat is down 5 1/4 cents. The Dow Jones Industrial Average is down 148.48 points at 40,209.61. The U.S. Dollar Index is down 0.220 at 104.23 and September crude oil is up $0.68 per barrel at $77.64. Wheat, soybeans, and soy products are mostly lower early Wednesday with corn now up a penny in slow trade. The weather ahead is threatening to corn, beans and spring wheat, but the crops remain above average at this point.
Livestock
Posted 08:34 -- October live cattle is steady, August feeder cattle are down $0.33 at $258.425, October lean hogs are down $0.43 at $76.70, December corn is up 1 1/2 cents per bushel and December soybean meal is down $0.40. The Dow Jones Industrial Average is down 180.17 points. Cash cattle country is off to another slow start Wednesday morning, following some scattered business reported in parts of Kansas Tuesday at $187, which is several dollars below current asking prices of $190-plus in that area. So, this may not be the actual trend for the week. Packer inquiry should improve as the day progresses, but it is very possible that significant trade volume could be delayed until sometime Thursday and/or Friday. The CME Feeder Index for July 22, 2024, was $1.07 higher at $257.74, the projected CME Lean Hog Index for July 22, 2024, was up $0.28, at $90.08.
(c) Copyright 2024 DTN, LLC. All rights reserved.
https://www.dtnpf.com/agriculture/web/ag/news/article/2024/07/24/periodic-updates-grains-livestock
The price of ten grams of 24-carat gold in Mumbai is in line with prices in Kolkata and Hyderabad, at Rs 70,850.
Gold Price Today: The price of 24-carat gold slipped Rs 10 in early trade on Wednesday, with ten grams of the precious metal selling at Rs 70,850, according to the GoodReturns website. The price of silver also declined by Rs 100, with one kilogram of the precious metal selling at Rs 87,900.
The price of 22-carat gold also slipped Rs 10, with the yellow metal trading at Rs 64,940. Click here to connect with us on WhatsApp
The price of ten grams of 24-carat gold in Mumbai is in line with prices in Kolkata and Hyderabad, at Rs 70,850.
In Delhi, Bengaluru, and Chennai, the price of ten grams of 24-carat gold stood at Rs 71,000, Rs 70,850, and Rs 71,450, respectively.
In Mumbai, the price of ten grams of 22-carat gold is at par with that in Kolkata and Hyderabad, at Rs 64,940.
In Delhi, Bengaluru, and Chennai, the price of ten grams of 22-carat gold stood at Rs 65,090, Rs 64,940, and Rs 65,490, respectively.
The price of one kilogram of silver in Delhi is in line with the silver price in Mumbai and Kolkata at Rs 87,900.
The price of one kilogram of silver in Chennai stood at Rs 92,400.
US Gold prices were flat in early Asian trade on Wednesday, with investors awaiting US economic data that could influence the Federal Reserve's rate-cut timeline.
Spot gold was little changed at $2,409.66 per ounce, as of 0032 GMT. US gold futures ticked 0.1 per cent higher to $2,410.50.
Spot silver steadied at $29.21 per ounce, platinum fell 0.3 per cent to $940.41 and palladium was flat at $925.50.
(with inputs from Reuters)
According to China customs data, China's alumina exports in June 2024 trended up M-o-M by 54.78 per cent to reach 157,100 tonnes versus 101,500 tonnes in May. The latest hike brought the country's cumulative exports during January-June to 810,700 tonnes.
However, China's alumina imports in June decreased by 58.8 per cent month over month, amounting to 37,700 tonnes. Also, the import volume slumped by 13.93 per cent year-over-year. From January to June, China's total alumina imports stood at 1.185 million tonnes, up 56.04 per cent from the corresponding period of the previous year.
Net imports of alumina in June were 119,400 tonnes, bringing the cumulative six months volume to 374,300 tonnes.
Among the sources, Australia topped the list in June, supplying 31,500 tonnes, which accounted for 86.21 per cent of China's total imports. Japan, Germany, and France were the three other exporters, providing 2,100 tonnes, 1,300 tonnes, and 1,300 tonnes, respectively.
The downfall in China's alumina imports during June could be attributed to supply cuts in the overseas market and the shutdown of the domestic spot import window for aluminium ore.
There were supply cuts of alumina in the overseas market owing to Alcoa's alumina production drop to 2.53 million tonnes during Q2, mainly due to a production cut at the Kwinana refinery. Similarly, Rio Tinto posted a 10 per cent Y-o-Y drop in its alumina output to 1.7 million tonnes due to a disruption in Gladstone operations caused by the rupture of a third-party-operated Queensland natural gas pipeline. Rio Tinto has also trimmed down its full-year production forecast from the previous 7.6-7.9 million tonnes to 7-7.3 million tonnes.
According to SMM, overseas metallurgical-grade alumina production in July 2024 will likely be 4.88 million tonnes, and overseas aluminium output will be 2.54 million tonnes.
The spot import window for alumina is unlikely to open in the short term, so imports will remain at a low level.
Teck Resources Ltd. is cutting its copper production forecast and hiking its costs just weeks after the Canadian miner’s focus narrowed significantly to rely only on metals.
Vancouver-based Teck on Thursday lowered its full year copper forecast by seven per cent to about 468,000 tonnes as it rolled out its second quarter financial results. The company also reduced its molybdenum forecast by 19 per cent.
Teck increased its copper cost forecast by two per cent to roughly US$2.10 a pound.
Teck’s copper issues stem mainly from challenges in the ongoing ramp up of its giant QB2 mine in Chile. The company is experiencing grade problems because it isn’t able to access certain areas of QB2 because of geotechnical issues and pit dewatering.
Teck put the copper mine in the high mountains of northern Chile into production last year after an arduous and expensive construction period. Teck’s costs ended up spiralling to about US$8.7-billion, or 85 per cent higher than a 2019 estimate.
Teck earlier this month closed the US$6.9-billion sale of 77 per cent of its metallurgical coal business to Glencore PLC of Switzerland. Teck had earlier sold the other 23 per cent of its coal segment to Japan’s Nippon Steel and South Korea’s POSCO.
Despite generating billions in free cash flow every year, over time fewer investors were willing to put money into Teck any more because of its exposure to coal. That’s because of ESG mandates that forbids many big investors from investing in fossil fuels. By focusing solely on metals such as copper, which doesn’t have the same dirty image as coal, Teck hopes to appeal to a wider class of investors.
The company’s B shares closed at an all-time high in May of $73.22 a share but have since pulled back by about 15 per cent. On Wednesday the shares were trading down by about 1.2 per cent in early trading on the Toronto Stock Exchange.
Glencore originally proposed buying all of Teck early last year, including the company’s copper and zinc mines, in a US$23.1-billion transaction. But Teck repeatedly rejected Glencore’s advances. Controlling Teck shareholder Norman B. Keevil said he was opposed to Glencore buying all of Teck, telling The Globe that “Canada is not for sale.”
Earlier this month, as Federal Industry Minister François-Philippe Champagne approved the Glencore takeover of Teck’s coal business, he sent a stern message that essentially echoed Mr. Keevil’s comments.
From now on, Mr. Champagne said he will only approve the acquisition of Canadian miners with significant critical minerals operations under the most exceptional of circumstances. That means that Teck and other big Canadian critical minerals miners are essentially takeover-proof.
Copper prices slipped again on Wednesday, and were hovering around a three-and-a-half month low hit in the previous session, amid demand concerns in top consumer China and a risk-off sentiment.
Three-month copper on the London Metal Exchange CMCU3 was down 0.1% at $9,161 per metric ton by 0656 GMT, its lowest since April 3.
The most-traded September copper contract on the Shanghai Futures Exchange SCFcv1 lost 0.5% to 74,950 yuan ($10,302.55) a ton, also its weakest since April 3.
Lower-than-expected second quarter economic growth and a lack of targeted stimulus to boost China’s ailing property sector from last week’s policy meeting sparked sell-off in metals.
Broadly, investors switched off risk appetite as they assess a possible U.S. administration led by Donald Trump might set more trade tariffs, impacting demand and the global economy, traders said.
However, the falling prices encouraged more demand in the spot market, which will lead to a gradual decline in copper inventories in China, said Shanghai Metals Market in a note.
The yangshan premium SMM-CUYP-CN, an indicator of import demand, rose to a three-month high of $18 per ton on Tuesday.
Miner Freeport-McMoran FCX.N remains bullish on copper demand, helped by massive investment in the power grid, renewable generation technology, infrastructure and transportation.
LME lead CMPB3 gained 0.3% to $2,066 a ton, zinc CMZN3 added 0.5% at $2,702, tin CMSN3 jumped 2.3% to $30,105, nickel CMNI3 ticked up 0.2% to $16,060, while aluminium CMAL3 was little changed at $2,296.50.
Citi delivered large amounts of lead to LME-approved warehouses in Singapore on Monday for profitable financial deals, three sources said, taking total LME stocks of the battery metal to their highest since early May.
SHFE aluminium SAFcv1 dipped 0.2% to 19,325 yuan a ton, nickel SNIcv1 rose 0.1% to 128,400 yuan, lead SPBcv1 added 0.3% to 19,155 yuan, tin SSNcv1 moved up 0.8% to 252,690 yuan and zinc SZNcv1 declined 0.9% to 23,040 yuan.
Source: Reuters (Reporting by Siyi Liu and Mei Mei Chu; Editing by Subhranshu Sahu and Varun H K)
Ongoing weakness in Chinese hot-rolled coil (HRC) prices has sparked a flurry of trading on the London Metal Exchange's (LME) fob China HRC contract this month.
More than 100,000t will trade this month for the first time since summer 2020, according to exchange data.
Physical Chinese prices have been plumbing new lows recently amid tepid domestic and export demand. Argus' fob China HRC index, cash-settlement basis for the LME contract, dropped by $3/t today to $497/t, its lowest since August 2020. Asian export offers also appear to have dropped, with a Vietnamese quote tabled around $20/t lower today into the UK.
A 5,000t trade went through on the LME today at $498/t for August, following softening physical and raw material costs — the blast furnace raw material basket has dropped by around $25/t over the course of July, and in a buyers' market sellers are expected to pass this reduction off.
There is increased talk that China will look to clamp down on steel exports where value-added tax (VAT) has not been paid, but market participants note the last attempt fell flat, and volumes have not reduced much. During January-June this year the world's largest producer exported 15.6mn t of HRC, compared with 10.4mn t over the first six months of last year, and a record 23.9mn t over the year as a whole.
"In line with the growth in Chinese steel exports, in recent months we have seen renewed activity in the LME steel fob China HRC (Argus) futures contract from across the global value chain," LME product specialist steel and nickel Alberto Xodo told Argus. Interest has stemmed from major Chinese exporters, steel merchants in Europe and Singapore, as well as industrial groups in southeast Asia and the Middle East, he added.
STEELASIA Manufacturing Corp. said it plans to invest P82 billion in constructing five new steel plants in the country to increase its annual output by 2.2 million metric tons.
The company aims to help address the Philippines’ reliance on imported steel by boosting local production, SteelAsia said in a statement on Wednesday.
The planned projects include the P18-billion facility in Lemery, Batangas; the P30-billion plant in Candelaria, Quezon; the P8-billion plant in Davao; and two plants in Concepcion, Tarlac, worth P26 billion.
The first three plants are expected to be completed by 2026, while the two plants in Tarlac are projected for completion the following year.
“We are building the mother industry for manufacturing. We are way behind our neighbors, but we will catch up,” said SteelAsia Chairman and Chief Executive Officer Benjamin Yao.
“And as we do so, our mills and steel products will create new manufacturing industries that will result in more jobs, higher-skilled workers, and economic growth, among others,” he added.
He noted that in 2022, the country spent over $3 billion on importing wire rods, billets, sections, and sheet piles — products that the new plants will produce.
“The steel produced by these new plants will be used in infrastructure, construction, and various downstream steel-intensive manufacturing industries,” he added.
SteelAsia currently operates six plants in Batangas, Bulacan, Davao, and Cebu, supplying over 70% of all rebar used in infrastructure, housing, power, industrial, and other business developments in the Philippines.
These six facilities have an annual finished steel capacity of three million metric tons.
Mr. Yao also said that expanding to more locations in the Philippines will help reduce transport costs, enabling the company to offer its products at consistent prices nationwide.
Two weeks ago, President Ferdinand R. Marcos Jr. attended the inauguration of SteelAsia’s plant in Cebu, which is expected to have an annual capacity of one million tons of rebar.
During the inauguration, Mr. Marcos urged the Department of Trade and Industry to update the Philippine steel industry roadmap.
Last April, SteelAsia secured an P8.3-billion loan from the Government Service Insurance System, the Development Bank of the Philippines, and the Philippine Business Bank to support the completion of its plant in Lemery, Batangas.
The same project was endorsed for green lane treatment by the Board of Investment’s One-Stop Action Center for Strategic Investments. — Justine Irish D. Tabile
Regional steel trading associations in China are seeking new quality standards for steel rebar, used in construction, to be delayed after news of the rules' planned implementation on Sept. 25 triggered inventory sell-downs, traders and analysts said.
China, the world's largest steel producer and consumer, on June 25 announced the mandatory standards to replace voluntary guidelines in place from 2018, prompting industry players to say they had been given too little time to work through existing stockpiles.
In Zhejiang province, local trade associations gathered on Tuesday and asked China's National Association of Metal Material Trade to request a delay to Jan. 1, 2025, according to a post on the WeChat account of the Hangzhou Steel Trade Industry Association on Tuesday.
"It has exacerbated the sentiment of sell-off activities in a market plagued by high stocks and low demand amid the property downturn," the post added.
Hangzhou is the capital of Zhejiang province, an industrial powerhouse in eastern China.
Some 30 steel trade associations have also sought a delay, consultancy MySteel posted on Wednesday.
Production of rebar fell by 11.7% to 102.35 million metric tons in the first six months of this year versus a year ago, dragged down by prolonged weakness in the country's property sector.
Some traders holding rebar inventories have sharply lowered prices to try to attract buyers, fearful that the products will become worthless and not accepted as deliverable cargoes by the futures exchange after Sept. 25, traders and analysts said.
Rebar futures prices RBF1! have fallen more than 4% in July to their lowest level since early April, while steel ingredients iron ore, coking coal and coke lost more than 6%, 5% and 7% respectively.
Thomson ReutersSteel and steelmaking ingredients under downward pressure
"The essence of the problem is that market players feel it's hard to fully draw down the existing inventories within three months at a time when demand is seasonally poor," Jiang Zhenzhen, a Beijing-based analyst at consultancy CRU Group, said.
China's State Administration for Market Regulation and Standardization Administration did not respond to requests for comment. The Shanghai Futures Exchange, which has yet to say whether it will accept rebar under the older standard after September, did not immediately respond to a request for comment.
The new standards will add between 20 yuan ($2.75) and 30 yuan per ton to production costs, mills, traders and analysts said.
Some steel mills have implemented equipment maintenance to ease supply and price pressure, CRU's Jiang added.
A south China-based steel producer, declining to be named as he is not authorised to speak to media said the change in the long run was good for the industry, but in the short term would raise costs.
($1 = 7.2763 Chinese yuan)
JSW Steel‘s CEO, Jayant Acharya, said the company expects to see more sales from its sustainable products in the future. JSW Steel recently reported its highest-ever sales to the renewables sector, up 130% year-on-year, driven by strong demand for its new product, Magsure. Magsure is a coated steel product with a Zinc-Magnesium-Aluminium alloy, designed to resist corrosion, making it ideal for solar installations.
JSW Steel aims to capture a 50% market share in this coated segment within a year of Magsure’s launch in India, reducing reliance on imports. The company is investing Rs 20,000 crore to focus on value-added and special product portfolios. Acharya mentioned that new capacities like the Hot Strip Mill 3 and JSW Vijayanagar Metallics Ltd will enhance their product supply.
The steelmaker is optimistic about India’s growth, expecting strong rural demand supported by connectivity and housing projects. Acharya predicted double-digit growth this year, with demand reaching 148-150 million tonnes.
In Q1FY25, JSW Steel’s net profit fell 64% due to lower sales volume and inventory losses amid declining steel prices. However, Acharya expects costs to decrease and volumes to rise in Q2, which will support EBITDA.
The company’s export focus remains at 10-15%, prioritizing the domestic market. As of June 2024, JSW Steel’s net debt to EBITDA ratio increased to 3x due to capital expenditure on expansion projects and working capital investments. Acharya said they aim to manage debt effectively, with increased volumes from new and existing operations.
JSW Steel is also working on securing raw materials to protect profits from supply-chain disruptions and price volatility. The company recently acquired a coal mining firm in Mozambique and is looking for more coking coal resources in Australia and the U.S.
Additionally, JSW Steel plans to participate in upcoming iron ore mine auctions in Karnataka and has already operationalized 13 out of 24 iron ore mines won through various auctions. The company also intends to operationalize three coking coal mines in India, producing about 2 million tonnes of clean coking coal.
https://themachinemaker.com/news/jsw-steel-focuses-on-sustainable-products-and-growth-jayant-acharya
