December 14, 2021 8:30 am - 3:30 pm CST Online Pricing: Complimentary Where energy connects The South American Virtual Forum offers attendees an in-depth look at the South American commodities markets, with a particular emphasis on Argentina and Colo...
Dec 14 2022
December 14, 2021 8:30 am - 3:30 pm CST Online Pricing: Complimentary Where energy connects The South American Virtual Forum offers attendees an in-depth look at the South American commodities markets, with a particular emphasis on Argentina and Colombia. We’ll examine oil and gas, LNG, biofuels, petrochemicals , and the impact of the energy transition on these industries. Join us from the comfort of your desk, to explore the issues impacting the markets today, and projections for the future, in topical sessions featuring Platts’ methodology, assessments, and pricing. What's included You can expect live presentations, real-time interaction, and the opportunity to engage in questions and answers with the speakers throughout, right from your desk. Key topics we'll cover -Latin American economic overview-South American upstream-Refined products markets-Shipping and freight markets-Petrochemicals demand and outlook-Biofuels and biodiesel in regional markets-Natural gas and LNG outlook-South American metals outlook REGISTER NOW MORE INFO
Countries in the Asia-Pacific region are grappling with the fallout from high energy prices, fuel supply disruptions and growing shortages of oil, gas and coal, and the situation is likely to worsen in coming months. The widening energy crisis has fo...
Jun 27 2022
Countries in the Asia-Pacific region are grappling with the fallout from high energy prices, fuel supply disruptions and growing shortages of oil, gas and coal, and the situation is likely to worsen in coming months. The widening energy crisis has forced regulators to intervene, ranging from the suspension of electricity markets to self-imposed blackouts and clamping down on non-essential energy consumption. Click here for the full-size infographic Related factbox : Asia-Pacific economies face escalating energy crisis
US partnership ‘to blow lid off offshore wind’ Singapore power cleans up via Lao PDR link EP approves ‘world’s biggest climate deal’ The US Department of Energy has pledged to work in partnership with state authorities to “blow the lid off” the domes...
Jun 27 2022
US partnership ‘to blow lid off offshore wind’ Singapore power cleans up via Lao PDR link EP approves ‘world’s biggest climate deal’ The US Department of Energy has pledged to work in partnership with state authorities to “blow the lid off” the domestic offshore wind market, with the Biden administration targeting 30 GW of capacity installed by 2030 and 100% clean electricity by 2035. The White House estimates there is a $109 billion revenue opportunity across the offshore wind supply chain this decade. Meanwhile several US solar companies have committed to spend over $6 billion to purchase 6 GW to 7 GW of solar modules annually starting in 2024 to support domestic supply chains. In Asia, Singapore has begun importing hydropower from Lao PDR via existing links in Thailand and Malaysia under a regional Power Integration Project, a scheme that has been in the works for decades. The low-carbon energy is key to Singapore’s long-term decarbonization strategy. South Korea is ramping up its hydrogen plan with chemicals maker LG Chem announcing plans to build a 50,000 mt/yr methane-fed hydrogen plant. Meanwhile Australia’s Green Hydrogen Taskforce, created in 2022, comprising Fortescue Future Industries (FFI) and German companies Covestro, E.ON, Linde, Luthardt, SAP, Schaeffler and Thyssenkrupp have called for fiscal support for early-mover hydrogen projects that might otherwise become stranded assets. Agreement in the European Parliament of proposed reforms to the EU Emissions Trading System places the scheme at the heart of Europe’s decarbonization effort, creating a reduction of 1.5 billion mt of CO2, according to the EP’s lead lawmaker for the reforms, Peter Liese. “We adopted with a huge majority the biggest climate law ever,” Liese said. Carbon prices increased 139% in 2021 on higher demand and tightening supply as emissions themselves rose 7.3% due to high natural gas prices dragging coal-fired plants back into the power market. That trend is set to continue, the Netherlands recently agreeing to lift generation restrictions on its remaining coal plants -- Henry Edwardes-Evans Americas SPGlobal.com Biden administration creates federal-state offshore wind development partnership US solar consortium to buy up to 7 GW of panels annually from 2024 Higher PJM energy market prices may have led to lower capacity auction bids Premium content (available exclusively on Platts Dimensions Pro ) Deteriorating US-China relations poses questions for US push for clean transportation sector Truck, bus manufacturers call for federal support to usher in zero-emissions fleet Asia SPGlobal.com Singapore commences first renewable electricity import from Lao PDR South Korea's LG Chem to build 50,000 mt/year blue hydrogen plant Australia-Germany group seek fiscal support for early-mover hydrogen projects Premium content (available exclusively on Platts Dimensions Pro ) FEATURE: Maritime decarbonization needs more incentives for drastic push Hydrogen Fuels Australia, Clara Energy to build Hume Highway H2 refueling stations EMEA SPGlobal.com TES focused on accelerating bankable hydrogen-ready terminals in Europe Clean energy boom leaves fossil spending behind as inflation, climate woes weigh: IEA Equinor, AMRC in second Humber low carbon hydrogen project funding bid Premium content (available exclusively on Platts Dimensions Pro ) Unconstrained Dutch coal 'easiest lever' to reduce gas demand: Platts Analytics EU parliament agrees position on carbon market reforms Quote of the week “While the world agreed we had an existential threat and the need to decarbonize, we had to wait for a country to invade anther country to make us realize we have to do something faster" -- Sanjay Kuttan, Chief Technology Officer at the Singapore-headquartered Global Center for Maritime Decarbonization Chart of the week US federal and state authorities are working together on an offshore wind supply chain roadmap Price of the week $4.05/metric tonne CO2 Platts’ CEC voluntary carbon credit price assessment has halved since the start of the year
South American FOB soybean oil outright prices have fallen by nearly 30% from all-time highs reached in late April, back to pre-Russia-Ukraine war levels, as demand has been weak while the global vegetable oil market is experiencing worsening macroec...
Jun 24 2022
South American FOB soybean oil outright prices have fallen by nearly 30% from all-time highs reached in late April, back to pre-Russia-Ukraine war levels, as demand has been weak while the global vegetable oil market is experiencing worsening macroeconomic conditions. Both the Argentinian FOB Up River and the Brazilian FOB Paranagua soybean oil prices for August dates were assessed at $1,391.34/mt June 23, the lowest for a front-month loading cargo since Jan. 24, according to Platts data from S&P Global Commodity Insights. Edible oil prices posted a sharp rally over the first half of 2022, with the Russian invasion of Ukraine on Feb. 24 fueling this upward movement as the conflict boosted crude oil prices and blocked several sunflower oil shipments from the Black Sea – a region that accounts for around two-thirds of the world's production of this commodity. In addition, Indonesia imposed on April 28 a ban on palm oil exports to curb rising domestic prices, leading to the Chicago Board of Trade soybean oil futures seeing 90 cents/lb highs as traders foresaw tighter global vegetable oil supplies. The FOB Up River and the FOB Paranagua soybean oil outright prices were assessed at historical highs above $1,900/mt on the same day, as per S&P Global data. The scenario has changed since then. Indonesia has resumed palm oil shipments, increasing its export permits – the nation is the world's largest producer and exporter of the edible oil. Besides, demand from key buyers, namely India and China, has been tepid in recent weeks. Indian buyers seem well covered for nearby requirements while Chinese traders struggle with local coronavirus-related lockdowns, market participants told S&P Global. To add to the bearish tone, there are also fears of a global recession. "The soybean oil prices at both the US and South America are currently trading down on account of easing in demand due to worsening macro conditions," Anilkumar Bagani, commodity research head at edible oil brokerage Sunvin Group, said. The CBOT soybean oil futures are now trading in the mid-60 cents/lb, the lowest levels since mid-February. "The weakness in energy prices from the recent highs, talks of lowering biofuel mandates in the EU and Indonesia's strong resumption of palm oil export supplies after the last month's ban has been pushing global vegetable oil prices down," Bagani said. He added that the European new rapeseed harvest and a better-than-expected Canadian canola sowing also contributed to the current fall in prices across edible oils. Argentina and Brazil are the first and the second largest soybean oil exporters, respectively, in the world. Argentinian shipments for the current 2021-22 marketing year (October-September) are pegged at 5.53 million mt while the Brazilian ones are seen at 1.95 million mt, according to the latest estimates from the US Department of Agriculture.
The US LNG sector has seen a flurry of activity this week, with a handful of new supply deals agreed and US LNG pioneer Cheniere Energy taking a final investment decision on the expansion of its Corpus Christi export facility. US LNG suppliers Ventur...
Jun 24 2022
The US LNG sector has seen a flurry of activity this week, with a handful of new supply deals agreed and US LNG pioneer Cheniere Energy taking a final investment decision on the expansion of its Corpus Christi export facility. US LNG suppliers Venture Global and Cheniere both announced separate sales deals with Chevron, while Venture Global also signed the first binding supply deal with a German company. Sempra Infrastructure, meanwhile, agreed a preliminary supply contract with the energy arm of chemicals giant Ineos, which came on the back of a similar deal announced with Germany's RWE in late May. And with its positive FID for phase 3 of Corpus Christi, Cheniere said it planned to bring new US LNG volumes to market by the end of 2025. Following Russia's invasion of Ukraine in February, international gas buyers have been increasingly looking to the US to lock down long-term LNG volumes. It comes as spot LNG prices remain at sustained highs given the continued tight global market conditions. The benchmark Platts JKM price for spot LNG into northeast Asia reached a record-high $84.76/MMBtu in early March, according to S&P Global Commodity Insights pricing data. The JKM has averaged $28.95/MMBtu so far in 2022 and was last assessed at $36.89/MMBtu on June 24. Supply deals Venture Global on June 22 said it had agreed two 20-year sales agreements with Chevron for a total of 2 million mt/year -- 1 million mt/year from the Plaquemines LNG facility and 1 million mt/year from CP2 LNG. Plaquemines LNG has been under full construction since August 2021 and the construction of CP2 LNG is expected to start in 2023, Venture Global said. On June 21, Venture Global also signed a 20-year deal with German utility EnBW for the supply of 1.5 million mt/year of LNG from the Plaquemines and CP2 LNG export facilities, starting from 2026. The agreement is the first direct binding offtake agreement for long-term US LNG signed by a German company. Germany's RWE in late May signed a heads of agreement with Sempra Infrastructure for the negotiation of a 15-year deal for the supply of 2.25 million mt/year of US LNG, but has yet to finalize the agreement. Chevron, meanwhile, also signed June 22 separate US LNG sales deals with Cheniere for a combined 2 million mt/year of supply at plateau from Cheniere subsidiaries. Under the first agreement, Chevron agreed to buy 1 million mt/year of LNG on an FOB basis from Cheniere's Sabine Pass facility. Deliveries are set to begin in 2026 and reach the full 1 million mt/year during 2027, continuing until mid-2042, the companies said. Under the second deal, Chevron agreed to take 1 million mt/year of LNG from Cheniere Marketing on an FOB basis with deliveries beginning in 2027 and continuing for 15 years. This agreement with Cheniere Marketing is subject to Cheniere taking FID on the further expansion of Corpus Christi beyond the Corpus Christi phase 3 project. The purchase price for LNG under the agreements is indexed to the Henry Hub price, plus a fixed liquefaction fee, they said. Cheniere's chief commercial officer Anatol Feygin said the new long-term agreements "underscore the growing demand for reliable LNG supply beyond 2040 and further support investment in additional LNG capacity beyond our Corpus Christi stage 3 project." Corpus Christi FID FID on Corpus Christi phase 3 was also announced on June 22 by Cheniere, which said it had also issued full notice to proceed to contractor Bechtel Energy for the more than 10 million mt/year project. "Reaching FID on Corpus Christi stage 3 represents an important milestone for Cheniere as we move forward on this significant growth project," CEO Jack Fusco said. He said the expansion would provide "much-needed" volumes to the global LNG market by the end of 2025. Fusco added that the project was supported by a global portfolio of long-term customers and reflected the call for investment in gas infrastructure to support long-term energy security.
Lockdowns to limit the spread of COVID-19 in China, especially in Shanghai, disrupted the supply chains of vehicle makers, who were already dealing with a shortage of semiconductor chips. Market projections became more uncertain after Russia invaded ...
Jun 24 2022
Lockdowns to limit the spread of COVID-19 in China, especially in Shanghai, disrupted the supply chains of vehicle makers, who were already dealing with a shortage of semiconductor chips. Market projections became more uncertain after Russia invaded Ukraine , as the latter was a key supplier of wire harnesses for vehicles to several European automakers. The invasion also affected chipmakers in the US as Ukraine manufactures gases such as neon which are used in lasers to produce the chips. Sanctions on Russia hit hard as over January to May, the region's vehicle sales sank 52% year on year to 318,114 units, data from the Association of European Businesses showed. Rising raw material costs are hitting electric vehicles, which will push EV retail prices higher. The Platts seaborne lithium carbonate and lithium hydroxide assessments jumped 115.9% and 139.4%, respectively, since the beginning of 2022 to $73,000/mt CIF North Asia and $75,900/mt CIF North Asia June 22, S&P Global Commodity Insights data showed. Market uncertainty is likely to cause greater reliance on contracted volumes, which could prolong future contract discussions and increase protection of supply chains. Forward gear: End of lockdown in Shanghai to mend supply chains Reverse gear: Vehicle retail prices could exceed disposable incomes Outlook Vehicle manufacturers are struggling to restore normal operations. Along with a likelihood that the war in Ukraine will not end anytime soon, the emergence of a bearish factor which could hit global economies could result in a recession never encountered before. “For many countries, recession will be hard to avoid,” World Bank President David Malpass said June 7. “Even if a global recession is averted, the pain of stagflation could persist for several years—unless major supply increases are set in motion.” Even though demand for new vehicles is strong, prices for these vehicles are rising and may well put them outside the comfortable price range for consumers whose earning power has been shrunk by at least two years of COVID-19 and their effects , notwithstanding inflation. Is it any wonder that stagflation is on the lips of economists and soothsayers? Moreover, growing food protectionism could very well lead to an obvious choice of either filling up stomachs or gas tanks or charging up an EV battery. US Vehicle inventories in the US remained tight as production struggled to recover from semiconductor shortages and other logistical challenges that began in the first half of 2021. Although vehicles at dealership lots will command record transaction prices, the impact of rising interest rates may curb this trend. Hot-rolled coil prices have been volatile since they touched the $1,500/st mark, assessed by S&P Global for its daily Platts TSI US hot-rolled coil index at the start of 2022. Semiconductor shortage hinders production Suppressed vehicle demand could lift output in 2023 Platts TSI US HRC index stood at $1,240/st on May 31, down 2.4% from $1,270/st on Jan. 31 EU New car registrations in the European Union dropped 13.7% to 3.72 million units over January-May, data from European Automobile Manufacturers Association showed, as semiconductor shortages negatively affected car sales across the region. For May alone, passenger car registrations fell 11.2% year on year to 791,546 units. Consumers in the region came under increasing pressure from rising inflation. Russia’s invasion of Ukraine compounded the bearish market, along with an impact on energy. Due to the uncertainties, EU vehicle makers who were able to recover quickly from the initial impacts could face declines in the near term. EU electric vehicle makers faced surging battery material costs. Glut and weak demand hit HRC markets in the EU Battery and vehicle makers step up plans to clinch future supplies May new car sales in Russia plummet to lowest since 2006: Autostat CHINA China’s vehicle production sank 12.6% year on year to 1.86 million units in May as lockdowns in Shanghai disrupted vital supply chains, data from the China Association of Automobile Manufacturers showed. But the country’s new energy vehicle production in May reached 466,000 units, up 113.9% on the year and 49.5% on the month. China’s automobile industry is expected to reach its full-year target, as domestic producers ramped up efforts to return production back to normal, CAAM said. China slashes tax on buying vehicles Higher raw material costs could hinder NEV growth NEVs more likely to benefit from government stimulus measures INDIA Indian vehicle production stood at 1.97 million units in May, up from 1.89 million units in April and 806,755 units in may 2021, data from the Society of Indian Automobile Manufacturers showed. However, as 2020 and 2021 were years when lockdowns took place to limit the spread of COVID-19, data from 2019 was viewed as better comparison. In this case, 2.42 million units were produced in May 2019, so May 2022 was 18.6% lower than the pre-COVID-19 level. As of May, the Indian market had not recovered from the impact of COVID-19. The Federation of Automobile Dealers Associations is taking a cautious stance regarding any recovery in vehicle sales in the near term. Higher wholesale prices for vehicles will reduce the disposable income of buyers, affecting vehicle sales India cuts excise duty on fuel prices to control inflation Local vehicle manufacturers, such as Maruti Suzuki, struggle to keep high production schedules
India’s imposition of steep tariffs on steel exports has put global markets in a tizzy, with unanswered questions on the longevity of the policy, immediate benefits to domestic end-users and strategies that local mills could adopt to manage excess in...
Jun 23 2022
India’s imposition of steep tariffs on steel exports has put global markets in a tizzy, with unanswered questions on the longevity of the policy, immediate benefits to domestic end-users and strategies that local mills could adopt to manage excess inventories. In this podcast, S&P Global Commodity Insights' experts, Senior Editor Ashima Tyagi and Lead Analyst Paul Bartholomew , discuss with Aruna Sharma , Former Secretary, Government of India the immediate and long term implications of this decision. They also weigh in on India’s diminishing role as an exporter of prominence and its future pace of capacity additions. More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).
In this episode of the Oil Markets Podcast, senior editor Emma Kettley and associate editor David Lewis discuss with Paul Hickin the recent changes in crude flows and how Russian crude finds its way in new markets. Our experts explain the changing tr...
Jun 23 2022
In this episode of the Oil Markets Podcast, senior editor Emma Kettley and associate editor David Lewis discuss with Paul Hickin the recent changes in crude flows and how Russian crude finds its way in new markets. Our experts explain the changing trade patterns in Europe where participants shun Russian barrels, which surprisingly didn’t prevent Urals exports to reach three-year highs in May. Tell us more about your podcast preferences so we can keep improving our shows. Take our two-minute survey here: https://bit.ly/plattspod22 More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).
Sugar production in the key Center-South Brazil region is expected to total 2.4 million mt in the first half of June, reflecting an increase of 7.7% on the year, an S&P Global Commodity Insights survey of 12 analysts showed June 23. During the survey...
Jun 23 2022
Sugar production in the key Center-South Brazil region is expected to total 2.4 million mt in the first half of June, reflecting an increase of 7.7% on the year, an S&P Global Commodity Insights survey of 12 analysts showed June 23. During the survey, the cane crush estimate ranged from 39.4 million mt to 45 million mt. The average estimate was for a total cane crush of 42.2 million mt, a 15.6% increase on the year. Weather in the Center-South was favorable for crushing during H1 June, with less than one day expected lost to rain and about 250-255 mills active as of June 16. "Although there is a wide range of estimates for the H1 June cane crush, there is still broad consensus, with the expected production mix still in favor for ethanol production compared to last year," according to S&P Global. "Additionally, H1 June production figures are expected to be higher than last year because of the heavy rainfall during H1 June 2021 in the Southeast, which had caused mills to shutter production for a few days." The proportion of cane used for sugar production is expected to be 44.6%, down from 46.2% a year earlier. Brazilian producers took advantage of the recent high price of ethanol during the early stages of the harvest, but now mills are expected to start shifting more of their cane crush toward sugar production. Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent was at 17.57 cents/lb on June 22, according to S&P Global data. The July NY11 sugar futures contract settled June 22 at 18.45 cents/lb, reflecting a 0.88 cent/lb premium to the hydrous ethanol price expressed in raw sugar equivalent ex-CBIOs. Sugar's premium to ethanol production would move closer to 0.25 cent/lb if decarbonization credits were added to the premium calculation. The CBIO, equivalent to 1 mt of CO2 not released into the atmosphere, is an instrument issued by biofuel producers and importers to ensure Brazil attains its decarbonization targets. Recoverable sugar per ton of sugar cane, or ATR, is expected to be 133.6 kg/mt, a decrease of 3.5% on the year. Total ethanol output from sugar cane is expected to be 1.95 billion liters, up 13.9% on the year. Hydrous ethanol output was expected to be 1.24 billion liters, according to the average of the analysts' responses to the survey. This would be an increase of 23.8% on the year. Anhydrous ethanol output in H1 June was expected to be 710 million liters, 0.1% lower on the year, according to the survey. Industry association UNICA is expected to release its official production figures early next week. CS Brazil Cane Production Data – H1 June 2022 (as of June 16) Category Unit Survey Platts UNICA (2021-22) Y-O-Y** var. Vol. y-o-y** Cane crush (million mt) 42.18 44.2 36.5 15.60% 5.68 ATR (kg/mt cane) 133.61 133.2 138.48 -3.50% -4.87 Sugar output (thousand mt) 2,398 2,500 2,227 7.70% 171.3 Ethanol total* (million ltr) 1,954 2,070 1,715 13.90% 239 Hydrous output* (million ltr) 1,244 1,320 1,005 23.80% 239 Anhydrous output* (million ltr) 710 750 711 -0.10% -1 Sugar Mix (%) 44.62 44.8 46.24 -3.50% -1.62 Ethanol Mix (%) 55.38 55.2 53.76 3.00% 1.62 *corn ethanol included Sources: S&P Global Platts Pre-Report Survey of Analysts Results, UNICA. **Year-on-year change compares S&P Global Platts Survey against UNICA's figures for 2021-22
Direct-reduced iron and its more transportable sister hot-briquetted iron have dallied in the wings of mainstream steelmaking as high-quality and low-residual furnace inputs for nearly 60 years. Suddenly the two have swept center stage for holding th...
Jun 22 2022
Direct-reduced iron and its more transportable sister hot-briquetted iron have dallied in the wings of mainstream steelmaking as high-quality and low-residual furnace inputs for nearly 60 years. Suddenly the two have swept center stage for holding the key to steel decarbonization. Combined with hydrogen instead of traditional natural gas and linked with efficient furnaces powered by renewable energy, they have the potential to provide the most effective route to making “green” steel, be it low-carbon or zero-carbon. That’s important in a hard-to-abate sector that accounts for up to 11% of all global CO2 emissions. Blast furnace steel production – accounting for two-thirds of global crude steel output of a massive 1.95 billion mt in 2021 – typically produces 2.0 mt/CO2 per mt of crude steel. DRI with hydrogen brings this below 0.5 mt/CO2 per mt, Singapore Exchange said at the SGX Iron Ore Forum in May. In the European Union, the race is on to make green steel commercially viable. The EU's overall greenhouse gas emissions reduction target for 2030 requires sectors covered by the Emissions Trading System, including steel, to reduce their emissions by 43% compared to 2005 levels. Free ETS allowances for steelmakers are to be phased out between 2026 and 2030, leaving mills with rising costs as they simultaneously adapt to new technologies, with consumers set to face green steel price premiums. Steelmaking using DRI and HBI promises to be a winner in this race. As a production route, it’s already established. Hydrogen-based DRI was produced at a commercial scale in Trinidad and Tobago using a fluidized bed reactor process as long ago as the early 2000s. Now the process needs to be fine-tuned and accompanied by a truly fossil-free energy source. “Direct-reduced iron is considered the primary actor in the transition to a sustainable steelmaking route,” said Pasquale Cavaliere, professor of metallurgy at Italy’s University of Salento. “And in order to produce carbon-free steel, hydrogen is fundamental.” Note: Global DRI production, including hot and cold DRI and HBI, has shown an upward trend since 790,000 mt was recorded in 1970. In 2020, well over half of global DRI output came from India (where production is largely coal-based in rotary kilns) and from Iran, which in addition to using Midrex technology, has its own natural gas-based technology, Pered. In 2020, global output fell from 2019 due to COVID-19. According to data from worldsteel, production totaled 102.77 million mt in 2021. High metallization cuts coal usage DRI and HBI are usually made from high-grade iron ore pellets typically reduced by gas to provide a highly-metallized raw material for both electric arc furnaces and traditional blast furnaces. According to US-based DRI technologist Midrex Technologies, HBI, which is metallized beyond 90%, needs only to be melted. Therefore, HBI use in blast furnaces decreases the consumption of reducing agents. A 10% increase in the metallization of blast furnace burden results in a 7% decrease in the coke rate, which in turn reduces CO2 emissions. If 100 kg of HBI/per mt of hot metal is used, the reducing agent rate (coke equivalent) can be decreased by around 25kg/mt of hot metal. Technology pathways Broadly, there are three routes to decarbonize steelmaking, according to the European Steel Technology Platform (ESTEP), which groups together the European Commission, national governments and major steelmakers in a bid to maintain EU leadership in the low-carbon steel production drive: Circular economy – based on scrap usage in both basic oxygen furnaces and EAFs Smart carbon usage – involving use of conventional blast furnace or BOF plants with add-on CO2 mitigation technologies such as Carbon Capture & Utilization or Carbon Capture & Storage Carbon direct avoidance – by using DRI or HBI None are simple or cheap. Scrap availability is growing only slowly worldwide, and its prices are increasing. Widespread supplies are dependent on China scrapping its first-generation consumer goods products, a wave now poised to break. And CDA needs ample supply of hydrogen and renewable energy at economical prices. Smart carbon is therefore the stopgap, but inevitably a short-term solution as it does involve carbon production. Still, this route could prevail for the next 20 to 30 years as that is the remaining useful lifespan of many existing blast furnaces. BHP CEO Mike Henry told a Financial Times mining summit late last year that the industry needs to take into account the “sunk capital” in those furnaces. “The economics of that will prove to be too challenging… for a rapid switch to hydrogen," he said. It could cost “many hundreds of billions of dollars” to decarbonize the world’s entire steel industry using green hydrogen-based DRI, according to the BHP chief. Green hydrogen, produced using renewable energy to electrolyze water, is at present expensive to make due to the high costs of renewable energy. The EC’s Green Steel for Europe initiative is currently spending Eur3 billion on research and development alone. European Steel Association, or Eurofer, said Eur31 billion investments are needed for 60 low-carbon projects in the pipeline. Looking forward, CDA should be the ultimate goal for steelmakers. In addition to via DRI/HBI processes, assuming a fossil fuel-free energy source, this may be offered by other processes under development: iron bath reactor smelting reduction hydrogen plasma smelting reduction enabling direct transformation of iron ore into liquid steel electricity-based steelmaking by iron ore electrolysis pure scrap usage World DRI production by region (million mt) Region 2018 2019 2020 Middle East/North Africa 47.19 50.15 50.04 Asia/Oceania 29.09 34.33 33.71 CIS/Eastern Europe 7.9 8.03 7.93 Latin America (incl. Mexico and Caribbean) 10.12 9.77 7.49 North America (US and Canada) 5.02 4.68 4.52 Western Europe 0.56 0.47 0.53 Sub-Saharan Africa 0.83 0.66 0.18 Source: Midrex Technologies, Inc. Scaling up A 1 million mt/year capacity used to be the maximum for DRI and HBI plants, but bigger installations are now emerging worldwide. Midrex installed a 2 million mt/year HBI plant at Austrian steelmaker Voestalpine’s Texas site in 2016, with steelmaker ArcelorMittal acquiring 80% of the project this year as part of a DRI global expansion strategy. Midrex’s DRI installation at Turkish steelmaker’s Tosyali Algerie produced more than 2.28 million mt last year, with a second 2.5 million mt/year plant ordered, to make increasing use of hydrogen. In March Tenova HYL, an Italo-Mexican DRI technologist, announced it will supply China’s largest hydrogen-based DRI facility so far, with a production capacity of 1 million mt/year of DRI, at Baosteel Zhanjiang Iron & Steel Co., Ltd using the ENERGIRON process developed by Tenova together with Italian plantmaker Danieli. This follows a 2020 order from HBIS Group for China’s first hydrogen-based DRI plant, of 600,000 mt/year capacity. BF and EAF installations worldwide are set to increasingly use DRI/HBI processes. Other steelmakers opting for or expanding the capacity of DRI/HBI installations as part of their decarbonization drive include Nucor Corporation, Salzgitter, and SSAB together with iron ore miner LKAB and energy producer Vattenfall in the HYBRIT project. SSAB claims that HYBRIT, using Tenova HYL DRI technology at a pilot plant in Sweden, is the first-ever producer of fossil-free steel, already being supplied on a trial basis to carmaker Volvo. Jefferies Research analyst Alan Spence reported May 19 that Northern Sweden has surplus fossil-free electricity, but transmission is a current bottleneck and thus a hurdle to long-term plans for a complete decarbonization of SSAB’s European footprint. All down to energy source Indeed, while direct emissions in the H2-DRI-EAF route may be reduced almost to zero, the final carbon footprint of this approach relies on the carbon intensity of electricity used – both for hydrogen production as well as to operate the electric arc furnace, said industry group Hydrogen Europe in a May 11 report. For the process to be beneficial in terms of net GHG emissions, the maximum carbon intensity of electricity used cannot exceed 513 gCO2 per kWh, it said. “According to our estimates, in order for the project to achieve breakeven, the hydrogen delivery price would have to be below Eur3.0/kg - in the 'high prices’ scenario and below 1.5 EUR/kg – in the 'adjusted prices’ scenario,” Hydrogen Europe wrote. “The estimated CO2 breakeven price is Eur140/mt for both price scenarios.” And that looks still to be some way off, in both cases. S&P Global Commodity Insights assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur10.99/kg ($11.48/kg) June 14, up from Eur4.18/kg a year ago, on soaring gas and power prices. Carbon was auctioned at Eur82.31/mt June 15. In short, still too high and too low, respectively, for cost-effective green steel.
Platts, part of S&P Global Commodity Insights, is seeking feedback on whether Russian material is part of the open spot market reflected in Platts European benchmark gasoline, LPG, and jet fuel assessments Platts has observed that an increasing numbe...
Jun 22 2022
Platts, part of S&P Global Commodity Insights, is seeking feedback on whether Russian material is part of the open spot market reflected in Platts European benchmark gasoline, LPG, and jet fuel assessments Platts has observed that an increasing number of market participants are restricting material from Russia, in part or entirely, in their spot gasoline, LPG, and jet fuel trading activity. Platts is seeking immediate feedback on whether the basis definition of open origin for its gasoline, LPG, and jet fuel assessments should continue to include Russian-origin material, or whether it should reflect the market move toward trading non-Russian material. Unless otherwise stated, Platts benchmark assessments in these markets currently reflect an open-origin basis, which could potentially include Russian-origin supply. All Platts assessments reflect merchantable commodities. Platts gasoline, LPG, and jet fuel assessments include FOB and CIF cargo markets in Northwest Europe and the Mediterranean, as well as FOB barges and coasters and FCA rail assessments. Platts is seeking clarity on whether participants in all these markets are adopting a similar stance with regard to Russian-origin material. Platts has already excluded Russian product from its European naphtha, diesel, and gasoil cargo assessments. The relevant subscriber notes are available here and here. Please send all immediate feedback, questions, or comments to Europe_Products@spglobal.com and PriceGroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by S&P Global for public viewing. S&P Global will consider all comments received and will make comments not marked as confidential available to the public upon reque
Grains traders Bunge and Viterra said June 22 that missiles had hit their grain and sunflower oil terminals in Nikolayiv, one of Ukraine's most important agricultural ports, as Russia's war with Ukraine encompasses key commercial assets. The attacks ...
Jun 22 2022
Grains traders Bunge and Viterra said June 22 that missiles had hit their grain and sunflower oil terminals in Nikolayiv, one of Ukraine's most important agricultural ports, as Russia's war with Ukraine encompasses key commercial assets. The attacks on Nikolayiv come just under four months after the country was invaded by Russia and on the same day a refinery in Southern Russia said that two drone strikes had forced it to suspend operations. The port typically handles around a third of Ukraine's total grain exports, and like Ukraine's other deep water ports, it had been closed since the end of February. The resulting loss of corn, wheat and sunflower oil to the global market has prompted U.S. Secretary of State Antony Blinken to accuse Russia of "weaponizing food." "Viterra can confirm that its Everi terminal was hit and is currently on fire. There are no fatalities," said a spokesman for Glencore's agricultural unit. The terminal has a total storage capacity of 160,000 mt and can load up to 1.5 million mt of vegetable oil per year, which is equivalent to around a quarter of Ukraine's total sunflower oil exports in the marketing year 2020-21 (July to June). Crop trader Bunge said its facility had also been hit. "A more thorough inspection is required to assess the exact impact on the facility," the company said in a statement, adding that the plant had been closed since Feb. 24. In its most recent annual report, the company said that it had total assets of $681 million in Ukraine as of Dec. 31, 2021. Bunge, which is the world's largest oilseed processor, also owns two crushing facilities in Ukraine and a share in a corn milling plant there. There were also reports of strikes at other facilities in the city, but they couldn't be confirmed. Ukraine is one of the world's largest grains producers and its war with Russia has led to food prices being driven up in recent months. Prior to Russia's invasion, the US Department of Agriculture had expected Ukraine to export 16.9 million mt of wheat and 33.5 million mt corn in MY 2021-22, which represented 12% and 16% of global trade, respectively, for the two grains. The June 22 attacks come two weeks after another Russian attack in Nikolayiv, which hit the Nika-Tera terminal, owned by Group DF, with a grain storage capacity of 515,000 mt. The most severe damage to any commercial asset so far inflicted by Russian troops has been in the steel sector with Rinat Akhmetov now seeking $17 billion to $20 billion from Russia for the damage to his Azovstal steelworks, according to an interview with Ukrainian news portal mrpl.city.
Soft wheat yields in the EU for the 2022-23 marketing year (July-June) have been slashed for a third straight month in June, drawing supply concerns as smaller EU output could further stretch wheat markets in the absence of key supplies from the Blac...
Jun 22 2022
Soft wheat yields in the EU for the 2022-23 marketing year (July-June) have been slashed for a third straight month in June, drawing supply concerns as smaller EU output could further stretch wheat markets in the absence of key supplies from the Black Sea. Soft wheat yields were cut to 5.76 mt/ha from 5.89 mt/ha, the EU Commission said June 21. The latest projection is also below the five-year average of 5.84 mt/ha for soft wheat yields. At the beginning of June, the EU Commission pegged soft wheat production for 2022-23 at 130.39 million mt, based off an area of 21.7 million hectares and a yield projection of 5.98 mt/ha. The commission has reduced the yield estimates primarily due to increased heat waves and continued drier-than-usual weather in some key producing regions. According to analysts, the EU wheat crop is likely to be smaller in MY 2022-23 (July-June) due to lower output in France, Romania and Bulgaria. France is the largest supplier of wheat in the EU, followed by Romania. According to the EU crop observatory, soft wheat output is forecast at 34.2 million mt in MY 2022-23, down from 35.5 million mt in MY 2021-22. For Romania, output of soft wheat is also forecast to drop to 10.4 million mt in MY 2022-23, down from 11.4 million mt in MY 2021-22, the EU crop observatory said. Trade impact Smaller output in the EU is likely to create concerns among major importers across the world as they seek to compensate for the likely decline in supplies from Ukraine. The EU has been a major supplier of wheat to Egypt, Turkey and other Middle East and Northern African nations. Even though these regions used to buy wheat from Russia, the Black Sea conflict has forced them to explore alternate options, including the EU, adding stress to the already-critical global wheat supply chain this year. The EU accounts for around 25%-30% of wheat exports to the Middle East and Northern African nations, while Russia accounts for 40%-45%, according to traders. Since the war in Ukraine, Algeria and Egypt have become major importers of EU wheat, together accounting for 30% of the EU's total wheat exports. What could further add to the supply woes is that buyers from Southeast Asia are also seeking out European wheat. Southeast Asia, which previously depended heavily on Australian wheat, altered its purchasing habits as Australian port capacities are almost full for the next few months. While Australia is reporting a bumper wheat crop, the stress on global wheat supplies has pushed prices of Australian wheat higher. Platts assessed FOB prices Australia's APW wheat at $450/mt on June 21, down $4 on the day, according to S&P Global Commodity Insights data. Meanwhile, the EU has emerged as a major supplier to the global markets. EU wheat exports are forecast at 36 million mt in MY 2022-23, up from 29.5 million mt in MY 2021-22, according to the US Department of Agriculture. But these export estimates could change if the unfavorable weather continues to put wheat crop prospects in the EU under pressure. Platts assessed FOB prices of 11% wheat from France at $404/mt on June 21, down $12 on the day, according to S&P Global data. Similarly, Platts assessed 12.5% wheat FOB prices from Romania at $434.75/mt on June 21, down $6.5/mt on day, according to the data.
As hurricane season 2022 unfolds in the US Gulf of Mexico, the implications for oil and gas infrastructure in the region are wide-ranging. More than ever, the whole world is watching the US Gulf as energy from the United States grows its presence in ...
Jun 21 2022
As hurricane season 2022 unfolds in the US Gulf of Mexico, the implications for oil and gas infrastructure in the region are wide-ranging. More than ever, the whole world is watching the US Gulf as energy from the United States grows its presence in global markets. Americas gas news manager Joe Fisher sits down with natural gas editor Alan Lammey and oil editor Jordan Blum to discuss what the forecast says and what tropical activity could mean for natural gas, LNG and oil. This Commodities Focus podcast was produced by Jennifer Pedrick in Houston. More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).
As part of its commitment to open and transparent pricing and product specifications, Platts, part of S&P Global Commodity Insights, would like to invite feedback on its Global LNG specifications guide, specifically the guidelines described in the me...
Jun 21 2022
As part of its commitment to open and transparent pricing and product specifications, Platts, part of S&P Global Commodity Insights, would like to invite feedback on its Global LNG specifications guide, specifically the guidelines described in the methodology guide posted online at https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_lng.pdf. Platts reviews all methodologies annually to ensure they continue to reflect the physical markets under assessment, and regularly assesses the relevance of methodologies through continuous contact with the market. Feedback on methodologies is always welcomed by Platts. Please send all feedback, comments or questions to lngeditorialteam@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.