India revives EV target
The Indian government is renewing efforts to support electric vehicles (EVs) as higher fuel prices and a depreciating currency threaten the country's economic growth. Delhi has drafted a new plan to boost EV production so that it accounts for 15pc of India's total vehicles in the next five years, and more than 30pc by 2030. The 15pc target will not be mandatory but the government will urge automakers to produce EVs. Delhi last year rolled out an ambitious target to replace all fossil-fuel vehicles with an all-electric fleet by 2030, which it later scaled back.
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US job growth nearly halved in April: Update
US job growth nearly halved in April: Update
Adds services PMI in first, fifth paragraphs, factory PMI reference in sixth paragraph. Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth slowed, signs of gradually weakening labor market conditions. A separate survey showed the services sector contracted last month. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Services weakness Another report today showed the biggest segment of the economy contracted last month. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) fell to 49.4 in April from 51.4 in March, ending 15 months of expansion. The services PMI employment index fell to 45.9, the fourth contraction in five months, in today's report. Readings below 50 signal contraction. On 1 May, ISM reported that the manufacturing PMI fell to 49.2 in April, after one month of growth following 16 months of contraction. In today's employment report from the Labor Department, average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Kazakhstan outlines Opec+ compensation plan
Kazakhstan outlines Opec+ compensation plan
London, 3 May (Argus) — Opec+ member Kazakhstan has submitted a plan to Opec detailing how it intends to compensate for producing above its crude production target in the first four months of the year. Kazakhstan and Iraq — which has also submitted a compensation plan — are the Opec+ alliance's largest overproducers and a key reason why the group exceeded its overall production in the first three months of the year . Kazakhstan's energy ministry said it produced above its target by 129,000 b/d in January, 128,000 b/d in February, and 131,000 b/d in March, according to secondary source estimates. Opec secondary sources, of which Argus is one, have yet to formally submit their production estimates for April, but Kazakhstan said it is factoring preliminarily overproduction of 100,000 b/d for April. The ministry said it kept oil production high because of high winter demand for natural gas — much of its gas production is associated and is produced alongside its oil. Kazakhstan said it would start its compensation plan in May with an initial cut of 18,000 b/d below its official target of 1.468mn b/d. It would then stick to its target in June and July before implementing a cut of 131,000 b/d in August, none in September, 299,000 b/d in October, 40,000 b/d in November and zero in December. The cuts have been designed to coincide with scheduled maintenance at the country's key oil fields of Kashagan and Tengiz, the ministry said. Kazakhstan would have to reduce its output by 149,000 b/d in May compared with its March production of 1.599mn b/d to meet its pledge, according to Argus calculations. The compensation plan is set to be adjusted once a final figure for April is available. The plan would be further adjusted to accommodate any change in the Opec+ alliance's output policy — for which a meeting is scheduled to take place on 1 June in Vienna. Opec has been increasing pressure on members exceeding their targets. It called last month on countries that have overproduced to submit detailed compensation plans by the end of April. The Opec+ alliance has implemented a series of cuts — voluntary or collective — worth a combined 5.4mn b/d since October 2022 in a self-described bid to "support the stability and balance of the oil market". The latest round of "voluntary" output reductions by several members came into force in January and is due to run until the end of June. By Aydin Calik and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iraq sets plan to compensate for excess Opec oil output
Iraq sets plan to compensate for excess Opec oil output
Dubai, 3 May (Argus) — Iraq, Opec's second-largest oil producer, has submitted a plan to the Opec secretariat outlining how it will compensate for producing above quota in the first quarter of 2024. The plan indicates that Baghdad will make compensatory cuts from May through to the end of this year, although its breakdown could be tweaked if its April production is again above quota, based on average production estimates issued by the seven Opec secondary sources, including Argus . Opec+'s Joint Ministerial Monitoring Committee (JMMC) said in its 3 April meeting that members that have produced above their quotas so far this year would need to submit plans to compensate for the excess. Iraq and Kazakhstan, which Opec said has also submitted its own compensation plan, have produced the most excess excess volumes in the Opec+ group since the beginning of the year. The JMMC oversees compliance to the coalition's crude production cuts and studies market dynamics. Iraq produced 194,000 b/d above target in January, and overshot by 217,000 b/d and 193,000 b/d in February and March, respectively. To compensate for this, Baghdad plans to produce 50,000 b/d below its quota between May and September, 100,000 b/d below quota for October and November, and 152,000 b/d below its quota for December. Iraq has been working to a quota of 4mn b/d since the start of the year, including two rounds of voluntary cuts it made in April and November last year. Baghdad will submit its crude production figure for April later this week, it said. Any extra volumes produced will also be factored into the country's compensation plan. To meet obligations, Baghdad says it will cap its crude burn at 75,000 b/d and maintain refining intake to between 400,000 b/d and 500,000 b/d through to the end of this year, according to Iraq's Opec national representative Mohammed Adnan Ibrahim Al-Najjar. But Iraq has yet to decide whether it will extend a 3.3mn b/d cap on exports, in place since April , beyond the second half, as it will depend on "Opec+ agreements [in the June meeting] and [the needs of] Iraq's economy over the coming months," the oil ministry told Argus last week. When needs must With the summer season around the corner in the Mideast Gulf region, Iraq has pushed the majority of its compensation into the last three months of the year. Iraq in summer often experiences extreme heatwaves resulting in a major spike in electricity demand. Power shortages during the summer season have fuelled political unrest in Iraq in recent years. To strike a balance between its Opec+ commitments and avoid similar scenarios this year, Iraq says it will import higher levels of gas from neighbouring Iran, with Baghdad also beginning to benefit from electricity supply from Jordan through a newly-established power line which became operational at the beginning of April. Iran and Iraq finalised a five-year supply agreement at the end of March, which will see Tehran send "up to 50mn m³/d" of gas to Iraq, Iraq's electricity minister Ziad Ali Fadel said. But Iraq's persistent overproduction, which has drawn scrutiny within Opec+, might be difficult to address, especially as Iraq blames it on its inability to oversee production in the semi-autonomous Kurdistan region in the north of the country. Most Iraqi Kurdish crude output is directed to local refineries or sold on the black market following the closure of the export pipeline that links oil fields in northern Iraq to the Turkish port of Ceyhan just over a year ago. Iraq's federal oil ministry says its Kurdish counterpart has stopped providing production data, but on 3 May said it estimates Kurdistan Regional Government (KRG) crude production to be between 40,000 b/d and 50,000 b/d. Meanwhile, Iraq's oil minister Hayyan Abdulghani on 2 May announced that two joint Baghdad-Erbil committees have been formed to resolve the issue of contracts between Erbil and the international oil companies operating in the Kurdistan region. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US met coal suppliers expect belated supply tensions
US met coal suppliers expect belated supply tensions
London, 3 May (Argus) — US coking coal prices have so far brushed off any impact of the collapse of the Francis Scott Key bridge in Baltimore on 26 March and the subsequent disruption of vessel traffic via the Port of Baltimore. Suppliers such as Arch Resources and Blackhawk that utilise the Baltimore shipping route have sought effective alternative arrangements so far and buyers have been largely comfortable despite some delays in laycans. Other suppliers such as Northern Appalachia's largest producer, Consol Energy's Bailey mine , which is a key supplier to Atlantic end-users, have faced more challenges, market participants suggest. The decline in fob Australia coal prices from last year's highs amid improved supply availability has also weighed on prices. The Argus assessed premium low-volatile coking coal fob Australia price was at $242.80/t on 3 May, largely unchanged from $254/t on 26 March after reaching a low of $224/t on 8 April. The US east coast prices have followed a similar trajectory, with low-volatile fob US east coast at $215/t today down from $220/t on 26 March after falling to a low in April. Low European demand has been one of the reasons behind the tepid response to coking coal shipment delays from the US. But with expectations of at least some recovery in the second half of 2024 and still no firm date on when the Baltimore traffic will return to normal, some US suppliers suggest coking coal prices may face some upward pressure later this year. Luxembourg-based steelmaker ArcelorMittal has kept its apparent steel demand outlook in Europe unchanged for 2024, expecting a growth of 2-4pc on the year . European steel association Eurofer downgraded its apparent steel consumption outlook for 2024 again , to 3.2pc from a previous forecast of 5.6pc, owing to worsening geopolitical tensions, economic uncertainty, energy prices, inflation and higher interest rates. But this would still be an improvement from a 9pc fall in steel consumption in 2023. There is also optimism among US coal suppliers that Brazil may be a source of renewed demand in the coming months with domestic steel production expected to improve. The Brazilian government is due to increase taxes for some imported steel products after facing pressure from the domestic steel industry to apply tariffs on imports, in particular on Chinese steel. Taxes will be increased to 25pc on 11 steel products — mainly flat rolled — contingent on such import levels exceeding prescribed quotas, the trade ministry's committee on foreign commerce, Gecex/Camex, said. Brazil's crude steel output reached 31.9mn t in 2023, down by 6.5pc on the year, World Steel Association data show. In the US, the fall in seaborne met coal prices also points to potential consolidation in the sector and the possibility of supplies tightening down the road. Industry participants highlight that some of the small and mid-sized mining operations that have emerged in the past two years amid a strong price environment are struggling. Bens Creek Group, which operates the Bens Creek Mining project in West Virigina with around 30,000-35,000st (27,200-31,800t) per month of coking coal output, filed for Chapter 11 bankruptcy in April. The year-to-date average price of high-volatile A for 2024 stands at $242.62/t fob Hampton Roads and is estimated to be above production costs for some of these mines. In 2022, high-volatile A prices averaged $347.81/t fob Hampton Roads, driven by a combination of market concerns over the Russia-Ukraine conflict and supply disruptions in Australia. While Russian coking coal remains available and competitively priced in the market, in particular a key supply source for China, US sanctions will continue to put pressure on major coal importers such as India and South Korea to reduce their Russian imports. The US announced fresh sanctions against Russian coal producer Sibanthracite's group of companies earlier this week. By Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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