UK launches new nuclear build fund Queensland signs hydrogen export MOU Momentum gaining for US certified gas Selling the energy transition to hard-pressed consumers is getting harder, politicians in Europe are finding. Financial support for hydrogen...
May 16 2022
UK launches new nuclear build fund Queensland signs hydrogen export MOU Momentum gaining for US certified gas Selling the energy transition to hard-pressed consumers is getting harder, politicians in Europe are finding. Financial support for hydrogen and nuclear in the UK, for instance, will add levies to household tariffs that have just gone up 54% due to soaring gas prices. Meanwhile Europe’s steel industry says it needs renewable hydrogen costs to fall to $3/kg for green steel to break even. As our hydrogen price wall shows, this is theoretically within reach in the US and Australia, but Europe is a long way off. In Asia, Queensland’s May 11 hydrogen export memorandum of understanding with the Port of Rotterdam is the third such deal offering the prospect of cheap Australian supply into Europe. Rotterdam has a target to import up to 20 million tonnes of hydrogen by 2050, starting with imports of ammonia in 2025. Meanwhile CORSIA-eligible carbon credits are to form a baseline for voluntary credits used to offset taxable emissions in Singapore, a government official said May 11. The aviation sector-recognized credits were “robust and credible”, backed by a multilateral process under the UN and widely accepted by industrial buyers. In the US, the Haynesville Shale has become a hotbed of certified natural gas production thanks to its close proximity to LNG export terminals and its naturally lower methane intensity. By the end of the year, roughly 53% of the basin’s gas output will be certified, and around 40% of those commitments were made this year. With this gathering momentum towards cleaner gas, Haynesville is slated to supply 35% of all US certified gas by end of 2022, bested only by Appalachia, which will supply 60%. Also on the Gulf Coast, two LNG projects were given extended construction deadlines from the Federal Energy Regulatory Commission last week – a positive sign for other export-related LNG projects awaiting a green light from regulators. Henry Edwardes-Evans EMEA SPGlobal.com Rare earth element prices to remain strong as demand exceeds supply: Ionic Hydrogen below $3/kg needed for breakeven green steel in Europe: industry body Renewable hourly certificates to bring transparency, aid liquidity, says Granular Premium content (available exclusively on Platts Dimensions Pro ) Nuclear levy will be added to UK household power bills: Kwarteng Rotterdam aims to supply 4.6 million mt/year of hydrogen by 2030 Asia South Korea's bourse operator pushes for futures market for carbon emissions China's new energy vehicle output, sales take sharp hit in April on pandemic Lack of consensus on premium of popular REDD+ carbon projects grow Premium content (available exclusively on Platts Dimensions Pro ) CORSIA-eligible carbon credits will be eligible to offset Singapore emissions: official Queensland signs hydrogen offtake deal with Port of Rotterdam Americas Right time, right place for Haynesville Shale to meet global call for cleaner natural gas FERC extends construction deadlines for two US LNG projects despite protests Energy security, Russia sanctions to be key topics as Biden meets with Italian, Asian leaders Premium content (available exclusively on Platts Dimensions Pro ) ERCOT’s Houston Hub has third day in a row of quadruple-digit real-time prices FERC approves NYISO capacity market changes targeting 100% carbon-free grid Chart of the week The Haynesville Shale is well placed to leverage its naturally low methane intensity. Quote of the week “However you slice or dice it, that is an awful lot of hydrogen” – National Grid’s Project Director for Hydrogen, Antony Green, on government projections for 250-460 TWh of hydrogen by 2050. Price of the week $5.10/mtCO2 Platts CEC (CORSIA-eligible) carbon credit assessment May 13, down 36% since Feb. 10.
The outlook for gasoline-related petrochemicals such as toluene, xylenes and MTBE remains relatively firm amid strong gasoline margins, while demand for most petrochemicals in key market China remains sluggish amid COVID-19 related lockdowns. Isomer-...
May 09 2022
The outlook for gasoline-related petrochemicals such as toluene, xylenes and MTBE remains relatively firm amid strong gasoline margins, while demand for most petrochemicals in key market China remains sluggish amid COVID-19 related lockdowns. Isomer-MX ** June demand appears firm this week as cargo supply is reduced amid turnaround at Japanese producer Taiyo Oil's 700,000 mt/year isomer-MX capacity as well as producers prioritizing gasoline production over aromatics due to strong margins. ** The paraxylene-MX spread narrowed to $62.67/mt May 6, the lowest since $61.50/mt on May 29, 2020, S&P Global Commodities Insights data shows. The spread is vital, especially for non-integrated producers of PX, that must source MX externally. If the spread remains around such levels, PX producers may be forced to consider run cuts or even idling plants, which in turn could negatively affect MX demand. ** China's MX demand remains sluggish and the East China inventory increased 22.6% week on week to 96,000 mt May 6. Toluene ** Asian toluene prices will continue to be well-supported this week amid tight inventories across Northeast and Southeast Asia, and continued strong buying from South Asia, trading sources said. There is no spot cargo available for June from Malaysia, Singapore and Thailand. ** There are several traders sourcing for cargoes particularly with paraxylene-toluene and benzene-toluene spreads still wide, making it favorable for TDP and MTPX producers in South Korea and the US to produce PX and benzene, trading sources said. ** China has been quiet on the import front as COVID-19 related lockdowns and restrictions hampered domestic operations. The initial wave of exports have now been placed to Korea, and supplies are being cautiously held back as there was an expectation that the lockdowns would be lifted soon, sources said. The driving and summer demand season for gasoline see economical margins with gasoline-Brent cracks and gasoline-naphtha spreads wide, sources added. Benzene ** Outlook in the Asian benzene market to remain mixed this week, although turnarounds in June would likely continue to keep fundamentals buoyed. ** Platts assessed FOB Korea benzene at $1,176.33/mt May 6, highest level in more than a month, S&P Global data showed. MTBE ** Asia's FOB Singapore MTBE marker was on an uptrend, bolstered by a bullish upstream energy complex along with newly announced EU sanctions on Russian oil, which sparked concerns over tight supply. MTBE supplies tightened on the back of lower run rates amid high feedstock costs. Methanol ** Asian methanol is expected to trade at stable to slightly softer levels this week as lockdowns in China weigh on consumer and crude oil demand, though upside could come from unexpected supply disruption in global oil and natural gas markets. ** While methanol demand in China was heard to be healthy among methanol-to-olefin plants, in some sectors, finished goods manufacturers faced delays in shipping their product out and this caused one or two methanol-to-olefin units to reduce their operating rates, sources said. ** CFR China was assessed $1/mt lower day on day at $347/mt May 6. Butadiene ** Asian butadiene will likely remain bearish the week of May 9, hit by slowing demand. Downstream market outlook such as styrene-butadiene-rubber will likely be weak as the lockdowns in China slowed economic activity, including automobile production. Market participants are also closely monitoring steam cracker operations in May. ** Butadiene supplies in Southeast Asia are seen increasing as well. In Malaysia, Pengerang Refining and Petrochemical, or PRefChem, aims to restart its 180,000 mt/year butadiene plant in the southern state of Johor in June. All of the company's supply will be sold in the spot market as it does not have a butadiene downstream plant. Propylene ** The propylene market is slated to remain under pressure this week as Chinese buyers continue to eye domestic material to meet their production needs. Shandong propylene hit Yuan 8,750/mt ex-tank May 6, up Yuan 375/mt from the week before. Buying interest for imports remain muted due to the extended lockdown of Shanghai. Polypropylene ** Asian PP is expected to remain rangebound this week on weak market sentiment. Last week, modest price gains were made in China on higher crude oil prices and the easing COVID-19 situation in Shanghai, but overall demand remains low as recovery is uncertain. ** Prices at major importer Vietnam continue to slide, capped by low domestic prices and inflows of competitively priced Chinese cargoes. PVC ** Trading activity will likely be limited this week as fresh offers for June are due to be released in the next few weeks. Market participants expect fresh offers to be reduced again in a bid to compete with China-origin cargoes after a $50-$80/mt month-on-month drop for May. ** Market participants are closely monitoring port operations in China as lockdowns slowed container shipping operations significantly. Oxo-alcohols ** The 2-Ethyl Hexanol CFR China marker is likely to be supported this week as replenishing needs and shutdown among production majors lend support. ** The tradable price for 2-EH China was heard at Yuan 13,000-13,300/mt in Shandong and east China, respectively, in the week to May 5, up Yuan 800-900/mt week on week. ** Supply from other producers in Northeast Asia remained tight due to planned shutdown among the majors. South Korea's Hanwha Solutions is restarting its 160,000 mt/year oxo-alcohol plant at Yeosu on May 19, following a planned turnaround, while LG Chemical is planning to shut its 2-EH Naju plant from early May. PTA ** Market sentiment is likely to remain mixed this week amid upstream volatility and the COVID-19 situation in China. Participants are adopting a wait-and see approach, seeking clarity regarding market outlook before conducting negotiations. ** Fundamentals are likely to remain stable this week given weak demand from downstream polyester and tighter supply from scheduled turnarounds by various PTA producers. R-PET ** Feedstock prices look set to remain elevated this week as demand continues to outstrip supply. High European prices and low collection rates for post-consumer bottles likely to keep outlook bullish.
Malaysia's palm oil inventories are expected to rise to 1.61 million mt at end-April, up 9.3% from a month before due to lower exports and better production, a S&P Global Commodity Insights survey showed May 9. April exports by the world's second lar...
May 09 2022
Malaysia's palm oil inventories are expected to rise to 1.61 million mt at end-April, up 9.3% from a month before due to lower exports and better production, a S&P Global Commodity Insights survey showed May 9. April exports by the world's second largest palm oil producer and exporters are likely to be around 1.15 million mt, down 8.7% from 1.26 million mt in March, according to the median estimate of ten analysts and traders polled by S&P Global. Cargo surveyors Amspec and Intertek had earlier forecast a bigger dip in exports, with April outflows projected to fall by 14% to 16% on the month as high prices dampened demand from key buyers in Asia and the EU. Demand from China, the world's second largest vegetable oil buyer, was negligible in the month due to the high price of palm oil vs soybean oil coupled with lockdowns in major cities which had capped appetite for imports. The Malaysian Palm Oil Board or MPOB will release its monthly data on May 10. Trade sources expect Malaysia's exports to surge in May, as bigger rival Indonesia announced a complete ban on palm oil exports starting from April 28 to curb accelerating food inflation and cooking oil shortages within the country. Indonesia's palm oil export ban is likely to be lifted by the end of this month, Manoj Shukla, senior analyst at Agriworld said. This may lead to a slump in Malaysia's ending stocks for May, but for April it may end up being the highest in six months, Shukla added. Jakarta has said that it will remove the ban when the domestic price of cooking oil goes below Rp 14,000/liter (96 cents/liter). Currently price is around Rp 17,000/liter. "Malaysian supply and demand data is looking bearish, but now the key factor is Indonesia's export policy." Abdul Hameed, director of sales at Pakistan-based Manzoor Trading Co said, adding that there is market chatter that Jakarta may introduce a quota system for exports in the coming days. Indonesia and Malaysia account for 85% of the world's palm oil supply. The S&P Global survey pegged Malaysia's April palm oil production at 1.48 million mt, up from 1.41 million mt in March. "Production is seen lower due to rain in the second half of the April as well as labor movement due to the Ramadan holidays," Aditya Jeripotula, head of research at Hyderabad-based commodities firm, TransGraph Ltd said. The price of local deliveries of Malaysian crude palm oil rose from MR 6,251/mt ($1,426.5) on April 1 to MR 7,605.5/mt on April 29, according to MPOB data. Malaysia' palm oil supply and demand April survey median April survey range March official data Production 1.48 1.34-1.58 1.41 Exports 1.15 0.99-1.25 1.27 Ending stocks 1.61 1.4-1.79 1.47 * all figures in million mt
California nears 100% renewables during solar peak China seen accelerating oil product export restrictions EC, manufacturers agree massive electrolyzer push Renewables met 99.87% of Californian power demand for a two-minute period on April 30 as favo...
May 09 2022
California nears 100% renewables during solar peak China seen accelerating oil product export restrictions EC, manufacturers agree massive electrolyzer push Renewables met 99.87% of Californian power demand for a two-minute period on April 30 as favorable conditions aligned. Renewable peaks typically occur in the spring due to mild temperatures and the sun angle allowing for an extended window of strong solar production, according to California Independent System Operator CAISO. “There are many pieces that still have to be in place before we have a fully operational decarbonized grid for longer periods of time,” said CAISO’s Anne Gonzales. On the East Coast, meanwhile, Eversource Energy plans to sell its equity in three offshore wind projects after a February lease sale attracted an astonishing $4.37 billion in bids. In Asia, China is accelerating efforts to eliminate exports of some transport fuels ahead of a target date of 2025 as part of its net-zero ambitions, Beijing-based sources with knowledge of the matter told S&P Global Commodity Insights. Meanwhile SEA-LNG's chairman Peter Keller believes LNG bunkering is set to receive a boost from a growing ship fleet, reflecting the need to switch to cleaner marine fuels. In Australia, LNG exporter Woodside has kicked off a carbon capture and utilization pilot plant in Western Australia using waste landfill gas to produce ethanol, while Japan’s Eurus Energy has signed an agreement to invest in Energy Estate’s Hunter Hydrogen Network project in New South Wales. Scrambling to disengage from Russian gas dependency, the European Commission has signed a joint declaration with electrolyzer manufacturers targeting a tenfold increase in manufacturing capacity by 2025. This would allow for some 10 million mt/year of green hydrogen production in the EU by 2030. Meanwhile April output from wind and solar farms across Europe's five largest power markets rose 19% year on year to 42 TWh, a record-high for the month. Year-to-date wind and solar output across the five markets is the energy equivalent of 316 standard LNG cargoes or around 32 Bcm of gas burned in a 50% efficient gas plant. Henry Edwardes-Evans Americas SPGlobal.com Tennessee certified gas plan sidelined over FERC's reluctance to review criteria Texas seeks regulatory authority from EPA over CO2 injection wells Premium content (available exclusively on Platts Dimensions Pro ) CAISO serves near 100% demand through renewables, says preview of things to come Eversource considers selling its positions in three US offshore wind projects ‘Massive disruption’: Senators pressure Biden to conclude solar trade probe Asia SPGlobal.com China's efforts to limit oil product exports gain speed in quest for net-zero China's new EV sales to stay healthy in 2022 despite COVID-19 disruptions: sources Russia-Ukraine war puts LNG in the spotlight, cleaner shipping rules: SEA-LNG chairman Premium content (available exclusively on Platts Dimensions Pro ) Australia’s EMRC, Woodside collaborate on pilot carbon capture plant Japan’s Eurus Energy invests in Energy Estate’s New South Wales hydrogen project EMEA SPGlobal.com EC, electrolyzer manufacturers target tenfold increase in European production capacity Kabanga Nickel 'not waiting' to complete feasibility, expects surging demand: CEO Premium content (available exclusively on Platts Dimensions Pro ) Scottish Power, Storegga eye 300 MW of green hydrogen in Scotland RES TRACKER: European wind, solar output hit record highs in April 'Simply not enough' to convert gas storage for hydrogen economy: Storengy CEO Quote of the week "We strongly support developing a domestic solar manufacturing supply chain, but current demand for solar products far exceeds existing domestic production capacity” – 22 US Senators in a letter to the Biden administration Chart of the week April wind and solar output across Europe’s five largest power markets rose 19% year on year to 42 TWh, a record-high for the month Price of the week GBP89.19/mt CO2 UK carbon allowances (nearest December) hit a fresh peak May 6 according to S&P Global Commodity Insights, reflecting negotiations in Europe on a tighter EU emissions trading system
Saudi Arabia is planning to develop a $2 billion EV battery metals plant and a $4 billion steel plate mill complex as part of $32 billion of investments targeting the kingdom's mining sector amid economic diversification in the world's biggest oil ex...
May 08 2022
Saudi Arabia is planning to develop a $2 billion EV battery metals plant and a $4 billion steel plate mill complex as part of $32 billion of investments targeting the kingdom's mining sector amid economic diversification in the world's biggest oil exporter. Nine projects are currently underway to increase local production and boost global exports, the minister of industry and mineral resources Bandar al-Khorayef said in a May 5 statement. "These targeted investments represent an important 'down payment' in our efforts to move beyond exploration and extraction and into the creation of integrated value chains, a central focus of our overall mining strategy," Khorayef said in the statement. "The investments will continue to position the kingdom as a mining production and logistics hub for a region that stretches from Africa to Asia, while also supporting the transformation of our mining sector so it can achieve its potential." The projects include a $4 billion steel plate mill complex that will produce various grades of steel plate for the shipbuilding, oil and gas, construction and defense sectors, the minister said. Another integrated green flat steel complex will supply the automotive, food packaging, machinery and equipment, and other industrial sectors, he added. A $2 billion EV battery metals plant will provide inputs for EV batteries, in support of the development of the electric vehicles industry in the kingdom, he said. The investments also include several other projects, all of which are focused on metals due to the growing demand expected from the developing Saudi industrial sectors, including a fully integrated aluminum complex and base metals smelter/refinery complex for copper and other metals, the minister added. No other details about the capacity and timeline of these projects were disclosed. Vision 2030 The ministry is currently processing an additional 145 exploration license applications from foreign companies, Khorayef said. Under Saudi Arabia's Vision 2030 diversification plan, the kingdom aims to support promising sectors and foster their success so that they become new pillars of its economy. In mining, Saudi Arabia is planning several structural reforms, including stimulating private sector investments by intensifying exploration, building a comprehensive database of its resources, reviewing the licensing procedures for extraction, investing in infrastructure, developing funding methods and establishing centers of excellence. Panelists at the Future Minerals Forum held in Riyadh in January noted that Saudi Arabia could play an important role in the critical mineral supply chains, due to its reliable and lower cost energy, optimal geological location to serve different areas including Asia and Europe, welcoming investment climate and aim to diversify its industries. Saudi Arabia has attracted some global names to its mining and industrial sector, including sustainable mobility company Lucid, which plans to build its first international plant in the country. Lucid, which counts the Saudi sovereign wealth fund as its largest shareholder, is building the factory to assemble vehicles that will ultimately produce up to 150,000 cars per year. Saudi Arabia has pledged to purchase over a 10-year period up to 100,000 electric vehicles, including Lucid Air and other future models, built and assembled at the company's existing Arizona factory and its future international manufacturing facility in the kingdom, it said in an April 26 statement.
Russia's agriculture ministry on May 6 set the variable export tax on wheat at $114.30/mt for the May 13-17 period, down $5.80 from the May 6-12 previous period, the first reduction in the export tax since March 16. The export tax had been rising fol...
May 06 2022
Russia's agriculture ministry on May 6 set the variable export tax on wheat at $114.30/mt for the May 13-17 period, down $5.80 from the May 6-12 previous period, the first reduction in the export tax since March 16. The export tax had been rising following higher export prices after the start of Russia's invasion of Ukraine. The variable export tax was introduced in Russia on June 2, 2021, to limit the increase in grains prices. The export tax is calculated as 70% of the difference between the average of export prices on an FOB basis during the 60 days preceding the day of calculation and $200. It is published every Friday and enters into force on Wednesday of the following week. S&P Global Platts assessed FOB Black Sea wheat (Russian Deep Sea, 12.5% protein) at $392/mt on May 5, down $2 week on week.
The state-owned oil giant PetroChina is not interested in taking discounted Russian oil and gas cargoes, but sticks to the producers' term supplies, CFO Chai Shouping said during the company's first quarter result conference call on May 6. Meanwhile,...
May 06 2022
The state-owned oil giant PetroChina is not interested in taking discounted Russian oil and gas cargoes, but sticks to the producers' term supplies, CFO Chai Shouping said during the company's first quarter result conference call on May 6. Meanwhile, PetroChina's settlements against the Russian goods were impacted to a certain extent from usual which were settled in US dollar or EURO, due to sanctions and some other factors, Chai said. But generally, the ongoing long-term contracts with Russia are proceeding and operating as usual, Chai add. PetroChina's parent company CNPC has long-term agreements with Russia's Rosneft, Transneft, Gazprom and Arctic LNG 2 to import crude oil, natural gas or LNG from Russia. CNPC has resold, and will for the foreseeable future resell, all or a substantial portion of the imported crude oil under the crude oil agreements to the company, its file to US Securities and Exchange Commission showed on April 29. The company has also imported natural gas via pipeline from Gazprom, and LNG from a subsidiary of Russia's OAO Yamal LNG. According to the file, the share of revenue derived from Russia-related operations in PetroChina's total revenue was 4.5% in 2021. With the term deals, CNPC agreed to import 800,000 b/d of pipeline crude from Russia, which is estimated to account for about 40% of China's total crude inflow from the non-OPEC producer, S&P Global Commodity Insights' data showed. Due to the Russia-Ukraine war, spot Russian ESPO's differential against Dubai has flipped to negative territory since March 4 on FOB Kozmino basis and is assessed at a discount of $23/b on May 6, S&P Global Commodity Insights Platts' assessment showed. While the discount for a Suezmax cargo of Urals against Dated Brent stay at a deep level of $36.615/b on an FOB Novorossiisk basis May 5. Oil product stock, demand In the refining sector, PetroChina's "oil product inventory is at a rather high level comparing with that of the beginning of 2022," senior vice president Ren Lixin said. Tight movement controls against the recent wave of COVID-19 have dampened domestic oil product demand. PetroChina slightly cut its refining utilization rate to 74% in April from 75% in the previous month to offset high inventory. Ren expected the stock level would go down when economic activities recover from COVD-19 resurgence. "For the entire 2022, China's economy growth will be maintained in a very appropriate range. We expect oil product demand to see a growth from last year," said Wang Hua, a finance director of PetroChina. Wang added oil product demand in Q1 was flat to slightly higher than the same period of last year, boosted by gasoil but pulled down by jet fuel. S&P Global's Platts Analytics estimated that China's oil demand would fall 6% year on year in Q2 and said that it is uncertain whether the reduction in Q2 will be compensated by recovery in H2 if Beijing continues with its zero-COVID strategy. Gas sales PetroChina sold 60.6 billion cubic meters of natural gas in the domestic market in the first quarter of 2022, up 10.9% year on year, the company's senior executive said. The growth was lower than that of 14.6% seen in the same period of last year, the company's historical data showed, but it was much high than a rise of 0.5% for the total natural gas consumption in China in Q1 2022, according to the senior executive. PetroChina imported 21.2 Bcm of natural gas, comprising pipeline gas and LNG, in the first three months of 2022, with a net profit of Yuan 3.47 billion, or Yuan 0.162/cu, Chai said. The volume was up by 2.3 Bcm or 12.2% from 18.9 Bcm PetroChina imported in the same period of last year, S&P Global Commodity Insights' calculations based on the company's historical data showed.
The current European energy crisis is a "stark reminder" of the vital role of LNG in ensuring energy security and economic stability, Jean Abiteboul, the president of industry group GIIGNL, said May 5. In the latest GIIGNL annual report, Abiteboul sa...
May 06 2022
The current European energy crisis is a "stark reminder" of the vital role of LNG in ensuring energy security and economic stability, Jean Abiteboul, the president of industry group GIIGNL, said May 5. In the latest GIIGNL annual report, Abiteboul said the group would monitor the "paradigm shift" in the sector over the coming year as governments and public institutions become increasingly involved in the LNG business. Europe in particular is looking to LNG to replace Russian gas imports and is rushing to install new LNG import infrastructure. Abiteboul said that additional investments "in all stages of the gas and LNG supply chains" would need to be made to meet expected demand growth According to the report from GIIGNL -- which represents the world's LNG importers and import infrastructure operators -- global LNG imports in 2021 rose 4.5% year on year to 372.3 million mt. Growth was driven by economic recovery in China, rising gas demand for power generation in South Korea, lower-than-expected pipeline supplies to Europe and reduced availability of hydropower in Brazil. The increase in global LNG demand came despite spot LNG prices moving higher throughout 2021. The benchmark Platts JKM spot Asian LNG front-month price averaged $18.60/MMBtu last year, compared with an average of just $4.39/MMBtu in 2020. Spot LNG prices have remained at sustained highs in 2022, with the JKM last assessed May 5 at $23.70/MMBtu. Of the total imports last year, 136.3 million mt -- or 37% of the total -- was imported on a spot or short-term basis, short-term meaning under a contract of four years or less. "True" spot volumes -- those delivered within three months of the transaction date -- accounted for 31% of total imports last year, or 116 million mt, GIIGNL said. Re-exports of LNG increased to 3.5 million mt, compared with 2.6 million mt in 2020. GIIGNL said that LNG demand would remain buoyant in the future due to the "much-needed" substitution of coal and polluting liquid fuels as well as the geographical mismatch between gas production and consumption regions. New importing markets Asia, GIIGNL said, remained the main demand center for LNG, growing by 7.1% to 272.5 million mt in 2021, with China overtaking Japan as the world's top LNG importing country. Chinese imports rose by 15% to 79.3 million mt last year. India, however, experienced the greatest decline in LNG imports, falling 9.8% due to the high spot LNG prices and the increase in domestic gas production. Global regasification capacity rose by 46 million mt/year last year, reaching 993 million mt/year, GIIGNL said. Four new large-scale terminals were brought into operation in Brazil, Croatia, Indonesia and Kuwait, while five expansion programs were completed -- four in China and one in Japan. Croatia last year became the 44th LNG importing market, while at least six new markets could start importing in 2022 -- El Salvador, Ghana, Hong Kong, the Philippines, Senegal and Vietnam, the industry group said. While demand growth remained strong, GIIGNL said LNG production had been struggling to keep pace, which contributed to the spot LNG price strength. Some 7.4 million mt/year of new capacity came onstream, of which 5 million mt/year in the US. "Global LNG exports were affected by unscheduled maintenance and shortfalls in feedgas," it said. Increased output from the US, Egypt, Malaysia and Russia was partly offset by lower exports from Angola, Indonesia, Nigeria, Norway, Peru and Trinidad. Only two final investment decisions on new liquefaction capacity were taken in 2021 -- the North Field expansion project in Qatar and Pluto LNG Train 2 in Australia. By 2025, more than 120 million mt/year of new liquefaction capacity is planned to progressively come online, "which should partly relieve tensions in the LNG market," GIIGNL said. Long-term contracts The LNG market has also been marked by a revival in long-term contracts given the ongoing supply uncertainties, mostly around risk to Russian pipeline deliveries. "In an environment marked by geopolitical tensions, risks of energy shortages and price volatility, last year saw a strong return of long-term contracts," GIIGNL said. "Asian buyers, notably Chinese NOCs and independent importers, played a leading role in securing new term purchases from the US, Qatar and Russia," it said. GIIGNL also said 68 new LNG vessels were delivered during the year, with the LNG shipping fleet reaching 700 vessels, including 48 FSRUs and 31 LNG bunkering vessels, representing a 9% increase in cargo capacity. Freight rates remained strong throughout the year and the orderbook at year-end was "remarkably high", with 196 units to be delivered by 2025, it said.
Physical Russian gas flows into Europe dropped back in April compared with the previous month, an analysis of flow data from S&P Global Commodity Insights showed May 6, but supply remained above January and February levels as the war in Ukraine rumbl...
May 06 2022
Physical Russian gas flows into Europe dropped back in April compared with the previous month, an analysis of flow data from S&P Global Commodity Insights showed May 6, but supply remained above January and February levels as the war in Ukraine rumbled on. Russian pipeline exports to Europe last month via its four main corridors -- Nord Stream, Yamal-Europe, Ukraine and the TurkStream string to Europe --totaled 8.27 Bcm, the data showed. That is down on the 9.79 Bcm of supply in March, when deliveries via Ukraine rebounded at times to the contractual maximum on favorable price spreads. April supplies were, though, higher than the 7.26 Bcm of exports in January and 7.79 Bcm in February despite a continued crunch on Russian gas flows via Belarus. Flows via the Yamal-Europe route were strongly constrained from late December due to the pipeline operating mostly in reverse mode eastward from Germany to Poland. Russia's Gazprom halted gas supplies to Poland and Bulgaria on April 27, with the true impact on overall Russian gas deliveries to Europe likely to be seen only in May. The cut-off triggered new concerns on the European gas market over Russia, leaving gas prices at sustained highs. The TTF month-ahead price reached a record high of Eur212.15/MWh on March 8, according to Platts assessments by S&P Global. The contract was last assessed on May 5 at Eur107/MWh, still 365% higher on the year. Ukraine transit Flows via Ukraine dropped back in April, with deliveries into the key entry point on the border with Slovakia at Velke Kapusany averaging just 57 million cu m/d, S&P Global data showed. The fall in supplies via Ukraine in April was likely a result of European spot prices dropping below the price of Gazprom contracted gas, leading buyers to nominate down their Russian purchases. Supplies via Velke Kapusany had averaged 78 million cu m/d in March as flows into Europe via Ukraine rose to the contractual maximum after the invasion triggered sharp spot price increases in Europe, making Gazprom's contracted gas more competitive versus gas at the European hubs. Total Russian deliveries via Ukraine in all pipelines in March were as high as 110 million cu m/d, in line with Gazprom's contractual obligations under its five-year transit deal with Ukraine signed in December 2019. Under those transit arrangements, Gazprom agreed to transit 65 Bcm of gas via Ukraine in 2020 and 40 Bcm/year in the period 2021-24, well down on a recent transit peak of 94 Bcm in 2017. In 2021, Gazprom delivered 41.6 Bcm of gas via Ukraine, having topped up its contractual obligations with some shorter-term bookings. TurkStream flows Supplies via TurkStream in April were also lower at 0.85 Bcm, the S&P Global data showed, having been above 1 Bcm for the four preceding months. Flows at the Strandzha entry point on the border between Turkey and Bulgaria fell to as low as 21 million cu m/d on April 27 when Gazprom halted deliveries under its long-term contract with Bulgaria's Bulgargaz. That is well down on the flows of up to 43 million cu m/d seen toward the end of 2021, S&P Global data showed. Total gas deliveries into Southeast Europe via TurkStream in 2021 amounted to 11.6 Bcm, or an average of 32 million cu m/d. The start in January 2020 of the two-string 31.5 Bcm/year TurkStream pipeline triggered an unprecedented reshuffle in the way Russian gas reaches Southeast Europe. One of the 15.75 Bcm/year strings feeds directly into the Turkish market, replacing volumes previously delivered via Ukraine in the Trans-Balkan pipeline, for which data is not available, while the other 15.75 Bcm/year string enters Bulgaria at Strandzha. Initially, gas mostly either stayed in Bulgaria or was transited to Greece and North Macedonia, with small volumes also moving into Romania. However, since the start of 2021, Russian gas sent via TurkStream is also now transited on to Serbia, Bosnia and Herzegovina, with Hungary also supplied via the new route since October 2021. Romania is mostly supplied with Russian gas via TurkStream, but in the first quarter also resumed small imports at the Isaccea entry point on the border with Ukraine. Flows via Isaccea were zero again in April, however. Imports via Isaccea were halted from April-December last year due to the shift to imports via TurkStream.
Preliminary numbers that the Port of Los Angeles posted indicate a 5.8% drop in twenty-foot equivalent unit liftings for April against the same period a year ago, marking the second- busiest April in the port's history. While finalized numbers have y...
May 06 2022
Preliminary numbers that the Port of Los Angeles posted indicate a 5.8% drop in twenty-foot equivalent unit liftings for April against the same period a year ago, marking the second- busiest April in the port's history. While finalized numbers have yet to be released, the port estimated volumes would total 890,000 TEU for April. "A bit lighter compared to last year's torrid pace, but still strong numbers by any measure," said port Executive Director Gene Seroka at a May 6 briefing. Imports totaled 459,918 TEU, down 6.2% on the year. Empty container moves, while registering a 2% decrease against the year, remained well above pre-pandemic averages at 334,852 TEU. Soaring empty exports are indicative of ongoing national trade challenges, Seroka said, adding that efforts are needed to boost exports and ensure accessibility to US export shippers. Finalized cargo metrics will be released as soon as final April data is available, the port said in a May 6 statement. Looking forward Cargo is still finding its way out of ports throughout central China," Seroka said. "So far, there's been no dramatic change in number of vessels leaving China since lockdowns six weeks ago." The port projects May and June volumes to come in at the mid- to upper 800,000 TEU range. "While conditions could change. I don't foresee a bust coming in Trans-Pacific trade," Seroka said. "More likely, we may see a lull in volume with a fairly quick bounceback when the lockdowns end. If this lockdown goes deeper into May or June, these are issues we're going to have to grapple with." Platts Container Rate 13—North Asia-to-West Coast North America—was assessed at $8,500/FEU May 6, up $400 from the start of the week.
Kabanga Nickel is accelerating work on its "development-ready" nickel sulfide deposit in western Tanzania, now planned to start production Q4 2025 or Q1 2026 to coincide with an "inflection point" foreseen in electric vehicle manufacturing, according...
May 06 2022
Kabanga Nickel is accelerating work on its "development-ready" nickel sulfide deposit in western Tanzania, now planned to start production Q4 2025 or Q1 2026 to coincide with an "inflection point" foreseen in electric vehicle manufacturing, according to the UK-registered private company's CEO. The project was sold by previous owners Barrick Gold and Glencore to the current owners around two years ago, with the Tanzanian government also taking a 16% stake and agreeing a 6% mineral royalty package. Already fully licensed, Kabanga Nickel is now updating an existing bankable feasibility study from 2015, CEO Chris Showalter said. However, management doesn't plan to wait another 12-14 months to complete the update, due to the favorable market prospects for the battery-grade nickel that the project will produce for EV batteries manufacture, he added. "We're not waiting for the feasibility study to complete before proceeding [with construction]," Showalter said in an interview with S&P Global Commodity Insights. "We have sufficient confidence in the existing feasibility study, and investment to allow procedures to continue." The project's planned start-up in 2025-26 should coincide "with a massive increase in EVs demand," he said, noting that Volkswagen is reported to have "sold out" of EVs for the European and US markets for the rest of this year due to surging demand. According to a January statement, BHP has agreed to invest $100 million in the project – with an initial $50 million and $50 million later this year, provided certain conditions are met. In turn, the mining major will acquire equity in the nickel mining and processing company. Of the initial tranche, $40 million has been invested in Kabanga Nickel and $10 million in Lifezone, which holds patents for the environmentally friendly hydrometallurgical process that will allow Kabanga to produce what Showalter describes as "clean" nickel, in the absence of a definition of "green" nickel. The total investment required in Kabanga Nickel is put at $1.3 billion, including $950 million in the mine and $350 million in the hydrometallurgical plant. The project's refined product output is expected to be some 48,000 mt/year of nickel; 7,000-8,000 mt/year of copper and 4,000 mt/year cobalt, in cathode or rounds form, produced to LBMA 99.9% purity standards. Due to the use of hydrometallurgy, CO2 equivalent emissions per mt of nickel produced at Kabanga will be 4-5 mt, making this one of the world's lowest nickel production carbon footprints, according to Showalter. Offtake 'competition' A "competition process" will be run at a later date for offtake by battery manufacturers, with carmakers and traders having already shown interest, Showalter said. No discussions have yet taken place for the potential setting up of a local battery precursors plant, although this could potentially be a "next step," he said. Kabanga Nickel, with a 33-year mine life at the production levels currently foreseen, is a "scalable" project whose useful life could be extended or production levels increased due to the high-grade nature of the deposit and exploration programs, Showalter said. Regional exploration, potential metals hub Due to the outstanding opportunities, Kabanga Nickel's developers are moreover already extending exploration activities into six contiguous areas in the region's mineral-rich Kibaran complex, Showalter said. The developers expect to be able to help create an east African mineral producing and processing hub based on hydrometallurgy, using LifeZone technology, he said. The Kibaran nickel mineral complex, said to be one of the most important worldwide, is a geological belt extending through Tanzania to Rwanda, Burundi and the Democratic Republic of Congo. Discussions have already taken place in the region about the possibility of establishing a mineral processing hub for the use of various companies and countries, according to Showalter. Tanzania's enlarged hydroelectric power capacity – with the recent coming on stream of the Rusumo dam and a grid expansion, as well as planned expansion of the rail network – should favor the development of the regional mining industry, Showalter indicated. Tanzania, whose government is now seen favorable to mineral development, including by foreign investors, has reserves of gold, copper, cobalt and graphite as well as nickel. London Metal Exchange cash nickel prices closed at $30,200/mt May 5, down 0.61% on the day. Used in stainless steel and battery manufacturing, the metal started the year with a price of $20,925/mt.
The current European energy crisis is a "stark reminder" of the vital role of LNG in ensuring energy security and economic stability, Jean Abiteboul, the president of industry group GIIGNL, said May 5. In the latest GIIGNL annual report, Abiteboul sa...
May 06 2022
The current European energy crisis is a "stark reminder" of the vital role of LNG in ensuring energy security and economic stability, Jean Abiteboul, the president of industry group GIIGNL, said May 5. In the latest GIIGNL annual report, Abiteboul said the group would monitor the "paradigm shift" in the sector over the coming year as governments and public institutions become increasingly involved in the LNG business. Europe in particular is looking to LNG to replace Russian gas imports and is rushing to install new LNG import infrastructure. Abiteboul said that additional investments "in all stages of the gas and LNG supply chains" would need to be made to meet expected demand growth According to the report from GIIGNL -- which represents the world's LNG importers and import infrastructure operators -- global LNG imports in 2021 rose 4.5% year on year to 372.3 million mt. Growth was driven by economic recovery in China, rising gas demand for power generation in South Korea, lower-than-expected pipeline supplies to Europe and reduced availability of hydropower in Brazil. The increase in global LNG demand came despite spot LNG prices moving higher throughout 2021. The benchmark Platts JKM spot Asian LNG front-month price averaged $18.60/MMBtu last year, compared with an average of just $4.39/MMBtu in 2020. Spot LNG prices have remained at sustained highs in 2022, with the JKM last assessed May 5 at $23.70/MMBtu. Of the total imports last year, 136.3 million mt -- or 37% of the total -- was imported on a spot or short-term basis, short-term meaning under a contract of four years or less. "True" spot volumes -- those delivered within three months of the transaction date -- accounted for 31% of total imports last year, or 116 million mt, GIIGNL said. Re-exports of LNG increased to 3.5 million mt, compared with 2.6 million mt in 2020. GIIGNL said that LNG demand would remain buoyant in the future due to the "much-needed" substitution of coal and polluting liquid fuels as well as the geographical mismatch between gas production and consumption regions. New importing markets Asia, GIIGNL said, remained the main demand center for LNG, growing by 7.1% to 272.5 million mt in 2021, with China overtaking Japan as the world's top LNG importing country. Chinese imports rose by 15% to 79.3 million mt last year. India, however, experienced the greatest decline in LNG imports, falling 9.8% due to the high spot LNG prices and the increase in domestic gas production. Global regasification capacity rose by 46 million mt/year last year, reaching 993 million mt/year, GIIGNL said. Four new large-scale terminals were brought into operation in Brazil, Croatia, Indonesia and Kuwait, while five expansion programs were completed -- four in China and one in Japan. Croatia last year became the 44th LNG importing market, while at least six new markets could start importing in 2022 -- El Salvador, Ghana, Hong Kong, the Philippines, Senegal and Vietnam, the industry group said. While demand growth remained strong, GIIGNL said LNG production had been struggling to keep pace, which contributed to the spot LNG price strength. Some 7.4 million mt/year of new capacity came onstream, of which 5 million mt/year in the US. "Global LNG exports were affected by unscheduled maintenance and shortfalls in feedgas," it said. Increased output from the US, Egypt, Malaysia and Russia was partly offset by lower exports from Angola, Indonesia, Nigeria, Norway, Peru and Trinidad. Only two final investment decisions on new liquefaction capacity were taken in 2021 -- the North Field expansion project in Qatar and Pluto LNG Train 2 in Australia. By 2025, more than 120 million mt/year of new liquefaction capacity is planned to progressively come online, "which should partly relieve tensions in the LNG market," GIIGNL said. Long-term contracts The LNG market has also been marked by a revival in long-term contracts given the ongoing supply uncertainties, mostly around risk to Russian pipeline deliveries. "In an environment marked by geopolitical tensions, risks of energy shortages and price volatility, last year saw a strong return of long-term contracts," GIIGNL said. "Asian buyers, notably Chinese NOCs and independent importers, played a leading role in securing new term purchases from the US, Qatar and Russia," it said. GIIGNL also said 68 new LNG vessels were delivered during the year, with the LNG shipping fleet reaching 700 vessels, including 48 FSRUs and 31 LNG bunkering vessels, representing a 9% increase in cargo capacity. Freight rates remained strong throughout the year and the orderbook at year-end was "remarkably high", with 196 units to be delivered by 2025, it said.
Chilly spring weather across much of the country curbed net injections to US natural gas storage in the final week of April, helping to widen the inventory deficit and propel a rally in NYMEX gas futures. The US Energy Information Administration May ...
May 05 2022
Chilly spring weather across much of the country curbed net injections to US natural gas storage in the final week of April, helping to widen the inventory deficit and propel a rally in NYMEX gas futures. The US Energy Information Administration May 5 reported a larger-than-expected injection of 77 Bcf to gas storage for the week ended April 29 in a build that barely undershot the prior five-year average. The injection was 16 Bcf more than anticipated from an S&P Global Commodity Insights' survey of analysts, which called for a 61 Bcf addition to stocks, and just 1 Bcf shy of the prior five-year average build. As a result, US working gas inventories climbed to 1.567 Tcf. The storage deficit to 2021 narrowed again as stocks climbed to 382 Bcf, or about 20%, below the year-ago level of 1.949 Tcf. The inventory deficit to the prior five-year average expanded to its widest yet this season, leaving stocks 306 Bcf, or about 16%, below the historical average of 1.873 Tcf, EIA data showed. The NYMEX Henry Hub June contract rebounded about 15 cents, or nearly 2%, after the storage report's release, rising to $8.30/MMBtu after falling steadily in overnight trading from fresh 14-year highs in the mid-$8/MMBtu range, CME Group data showed. Weather Unseasonably low temperatures across the Midwest and the Northeast through April and even into early May have been a key driver of the NYMEX futures rally and the widening storage deficit. In the week ended April 29, population-weighted temperatures across the Upper Midwest averaged a chilly 54 degrees Fahrenheit, while the Northeast rose to just 55 F. During the week, US residential-commercial gas demand, led by the two key heating regions, briefly spiked to more than 25 Bcf/d, S&P Global Commodity Insights data showed. Storage builds of 15 Bcf in both the Midwest and the Northeast, totaled about 4 Bcf below average for the corresponding week. In the Mountain and Pacific regions, the weekly storage injections were also undersized, but more than offset by a larger-than-average build in the South-Central region. During the week in progress, a smaller but not insignificant jump in US heating demand to around 20 Bcf/d could limit storage injections again. According to preliminary forecasts S&P Global published, the EIA is likely to report a storage injection in a 65-75 Bcf range for the week ending May 6, compared with a five-year average injection of 82 Bcf in the corresponding week. Supply The chilly start to spring this year has increased the call on already-strained US gas supply. After trending at more than 93 Bcf/d in April, domestic production has slumped since the start of May to average just 92.6 Bcf/d this month, according to S&P Global data. While the US rig count, at 803, is now estimated at its highest in over two years, US gas production has continued to flounder, trending about 2-3 Bcf/d below record highs recorded in December 2021. According to S&P Global analysts, a rebound in production to over 95 Bcf/d would likely ease acute supply concerns in the market, allowing gas futures prices to retreat below $6/MMBtu. An increase to over 97 Bcf/d is forecast to have an even larger impact, likely easing prices to around $4 to $5/MMBtu. Current supply projections show output topping 95 Bcf/d by midsummer and surpassing 97 Bcf/d by sometime in the fourth quarter, potentially giving pause to the NYMEX rally by later this year.
India's crude steel production reached 9.85 million mt in April, up 3.1% year on year, data from the Joint Plant Committee showed May 4, amid an increase in production capacity. The annual output rise is a result of JSW Steel firing up a second blast...
May 05 2022
India's crude steel production reached 9.85 million mt in April, up 3.1% year on year, data from the Joint Plant Committee showed May 4, amid an increase in production capacity. The annual output rise is a result of JSW Steel firing up a second blast furnace at Dolvi, Maharashtra on Oct. 3, 2021, which doubled the Dolvi Steel Works' production capacity to 10 million mt/year. Likewise, production of finished steel hovered at 9.35 million mt in April, 0.9% higher from the previous year while hot metal production grew by a similar 1% from a year ago. Nevertheless, steel demand from domestic vehicle makers is under downward pressure as a global semiconductor shortage has prevented the makers from meeting demand. There was strong demand for passenger vehicles but waiting periods were long due the shortage of automotive parts, which has hindered vehicle production, according to Federation of Automobile Dealers Association, or FADA. India's biggest carmaker Maruti Suzuki manufactured 157,392 vehicles in April, down 1.6% from 159,955 vehicles a year ago. "The shortage of electronic components had a minor impact on the production of vehicles during the month," Maruti said May 1. FADA cautioned in April that the Russia-Ukraine war and COVID-19 lockdowns in China will further dent supply chains, thus hampering production further. FADA expects the Indian automotive industry to return to pre-pandemic highs in the fiscal year 2023-24 (April-March). As for finished steel trades, both imports and exports fell in April against the year before due to lower international demand. In Europe, buyers refrained from making new deals with overseas suppliers due to long lead times, while they expected import prices to move down further. Buyers also avoided bookings with European steelmakers as they anticipated domestic prices will drop due to competitive import offers. Indian Steel Data (million mt) Mar 2022 Apr 2022 Change (%) Apr 2021 YOY Change (%) Apr 2020 Apr 2022/2020 Change (%) Crude Steel Output 10.94 9.85 -9.9 9.55 3.1 3.29 199.2 Finished Steel Output 10.56 9.35 -11.4 9.27 0.9 1.57 495.2 Finished Steel Imports 0.35 0.33 -6.8 0.36 -10.2 0.41 -19.7 Finished Steel Exports 1.20 0.74 -37.8 0.95 -21.9 0.43 73.2 Source: Joint Plant Committee
Australia's Eastern Metropolitan Regional Council and Woodside are collaborating on a carbon capture and utilization pilot plant in Western Australia state using waste, the energy firm said May 5. The two parties have agreed to set the terms of a pro...
May 05 2022
Australia's Eastern Metropolitan Regional Council and Woodside are collaborating on a carbon capture and utilization pilot plant in Western Australia state using waste, the energy firm said May 5. The two parties have agreed to set the terms of a proposed option to lease land that will enable Woodside to use EMRC's Red Hill Waste Management Eco Park for the proposed facility, according to the statement. "Woodside's climate strategy has two key elements: reducing our net equity Scope 1 and 2 greenhouse gas emissions, and investing in the products and services that our customers need as they too reduce their emissions," Meg O'Neill, CEO of Woodside, said. The proposed carbon capture facility will convert greenhouse gases, such as methane and carbon dioxide into value-added ethanol, using technologies developed by US companies ReCarbon and LanzaTech, the statement said. ERMC will supply landfill gas to Woodside. "The pilot aims to demonstrate that the integration of these technologies has the potential to contribute to decarbonization and a circular carbon economy," the statement said. The option to lease and construction of the carbon capture facility is subject to a final investment decision by Woodside in the second half of 2022, with targeted completion and commissioning in the second half of 2024, the statement added. Woodside has a target for net-zero by 2050 or sooner, it said on its website. EMRC is a regional local government working on behalf of five member councils located in Perth's eastern region that covers a third of Perth's metropolitan area and is home to 338,000 people. It provides waste management, resource recovery, natural and urban environmental management and regional development. Woodside is complementing its hydrocarbon business with hydrogen, ammonia and solar projects in Australia and internationally. It has hydrogen and ammonia projects H2Perth in Western Australia and H2TAS in Tasmania and a hydrogen project H2OK in North America. In November 2021, Woodside, BP and Japan Australia LNG Pty Ltd, which is owned by Mitsubishi Corporation and Mitsui & Co., Ltd., agreed to form a consortium to progress feasibility studies for a large-scale, multi-user carbon capture and storage project near Karratha in Western Australia.