El Nino to end in April-May: Australia’s BoM
The El Nino weather phenomenon has peaked and is declining, Australia's Bureau of Meteorology (BoM) said, pointing to neutral El Nino–Southern Oscillation levels developing in the southern hemisphere from April.
International forecasts and observations suggest surface temperatures in the equatorial Pacific are expected to return to neutral levels, indicating neither an El Nino nor La Nina phenomenon by April or May, with the latest climate model from the BoM returning to neutral in June.
The forecast for more neutral climate drivers comes after a wetter than expected summer for much of eastern Australia, foreshadowed by a positive Southern Annular Mode (SAM) in December-January, which typically brings above average rainfall for parts of eastern Australia and Tasmania. The SAM will become briefly positive in early February before returning to neutral, the BoM said on 6 February.
February rainfall is forecast to be below median for most of Australia, with February-April rainfall likely to be below median for northern Australia, including the coal-producing areas of Queensland state's Bowen basin.
The Madden–Julian Oscillation (MJO) is currently over the western Pacific, where it increases the chance of above average rainfall across northeastern Australia. But most models suggest it will move eastwards, losing strength this week.
Australia's wetter and milder than anticipated summer weather led to predictions of lower farm incomes for the 2023-24 year ending 30 June, and concerns about bushfires affecting key export corridors for commodities such as coal, which have not eventuated so far.
Cattle supply has been impacted by the lingering effects of ex-Tropical Cyclone Kirrily, which led to localised flooding in parts of Queensland, with wet conditions across the region cutting demand for bitumen productsCoal loadings were disrupted at a number of Queensland's ports and slowed chartering activity, although terminals reopened two days later. But the wetter-than-expected weather has been blamed for coal ship queues remaining long in 2024.
Australian cattle slaughter rates, which were predicted to rise significantly in 2024 under El Nino conditions, may be revised down if fewer breeders are directed to processors because of more positive weather patterns.
Related news posts
South Africa adopts climate change law
South Africa adopts climate change law
Cape Town, 25 July (Argus) — South Africa's president Cyril Ramaphosa has signed into law the country's climate change bill, which sets out a national response to climate change for the first time. The new climate change act will enable the orderly reduction of greenhouse gas (GHG) emissions through the implementation of sectoral emission targets towards South Africa's commitment to reach net zero by 2050. Currently, the country is the 15th largest GHG emitter in the world, according to the World Resources Institute. The law provides policy guidelines to ensure South Africa reaches its nationally determined contribution (NDC) under the Paris climate agreement by assigning individual enterprises carbon budgets and facilitating public disclosure of their progress. In its updated 2021 NDC, the country has undertaken to cut its GHG emissions to 350mn-420mn t of CO2 equivalent (CO2e), equivalent to 19-32pc below 2010 levels, by 2030. The lower end of this range is in line with the Paris Agreement's 1.5°C global warming threshold. To meet this, South Africa will have to achieve a steep decline in coal-fired electricity generation. A carbon tax is seen as a vital component of the country's mitigation strategy, according to the president. "By internalising the cost of carbon emissions, carbon tax incentivises companies to reduce their carbon footprint and invest in cleaner technologies, and also generates revenue for climate initiatives," Ramaphosa said. South Africa's carbon tax was introduced in a phased approach in June 2019 at a rate of 120 rands/t ($7/t) of CO2 equivalent (CO2e) and increased to R134/t of CO2e by the end of 2022. But tax-free allowances for energy-intensive sectors such as mining, and iron and steel, along with state-owned utility Eskom's exemption, implied an initial effective carbon tax rate as low as R6-48/t of CO2e. South Africa's National Treasury is targeting an increase to $30/t of CO2e by 2030. But the extension of phase one from the end of 2022 to the end of 2025, together with an uncertain future price trajectory and lack of clarity on future exemptions, means the effective carbon tax rate is likely to remain well below the IMF's recommended $50/t of CO2e by 2030 for emerging markets. The new climate change act seeks to align South Africa's climate change policies and strengthen co-ordination between different departments to ensure the country's transition to a low-carbon and climate-resilient economy is not constrained by any policy contradictions. It outlines South Africa's planned mitigation and adaptation actions aimed at cutting GHG emissions over time, while reducing the risk of job losses and promoting new employment opportunities in the emerging green economy. The law also places a legal obligation on provinces and municipalities to ensure climate change risks and associated vulnerabilities are acted upon, while providing mechanisms for national government to offer additional financial support for these efforts. The new act formally establishes the Presidential Climate Commission (PCC) as a statutory body tasked with providing advice on the country's climate change response. Among other things, the PCC is developing proposals for a just transition financing mechanism, for which a platform will be launched in the next few months. Over the last three years, South Africa has seen an increase in extreme weather events often with disastrous consequences for poor communities and vulnerable groups. To address the substantial gap between available disaster funds and the cost of disaster response, the government announced in February that it would establish a climate change response fund. At the time of the announcement, Ramaphosa reiterated that South Africa would undertake its just energy transition "at a pace, scale and cost that our country can afford and in a manner that ensures energy security". Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
BayWa suspends 2024 profit forecast over restructuring
BayWa suspends 2024 profit forecast over restructuring
London, 25 July (Argus) — German agricultural group BayWa on Wednesday suspended its full-year profit forecast due on 8 August, citing ongoing restructuring. It posted a preliminary revenue of €10.7bn ($11.6bn) for the first half of the year, down by 15pc from €12.6bn a year ago. BayWa's first-half 2024 preliminary earnings before interest, tax, depreciation and amortisation stood at €149.5mn, less than half of the €322.1mn earned in the same period last year. BayWa said it continues to be in constructive talks with its financing partners, adding that it also has postponed publication of the final half-yearly results to 27 September, citing impairment reviews. The company commissioned a restructuring report on 12 July in response to a "strained financing situation". The Munich-headquartered BayWa Group operates in the fields of energy, agriculture — including fertilizers — and building materials. By Suzie Skipper Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore shortlists consortia for NH3 power, bunkering
Singapore shortlists consortia for NH3 power, bunkering
Singapore, 25 July (Argus) — The Maritime and Port Authority of Singapore (MPA) and the Energy Market Authority (EMA) selected two consortia, with one of them likely to lead the project to develop ammonia as a low or zero-carbon solution for power generation and bunkering in the island nation. MPA and EMA selected the two consortia from a total of [six firms that were shortlisted in 2023]https://direct.argusmedia.com/newsandanalysis/article/2501511), after a request for proposal (RFP) was launched. The final selection from the chosen two will be made in the first quarter of 2025. This project, which is part of Singapore's national hydrogen strategy , is looking at developing end-to-end ammonia solution that can generate 55-65MW of electricity via direct combustion in combined cycle gas turbines. Low- to zero-carbon ammonia would be imported and used for this purpose. The project is aiming for 100,000 t/yr of ammonia bunkering, starting with shore-to-ship bunkering followed by ship-to-ship bunkering. The two consortium leads are Singaporean conglomerate Keppel's arm Keppel Infrastructure, as well as Singaporean-based Sembcorp-SLNG. The consortia also include the following bunkering participants - Japan's shipping firm NYK Line, as well as Japanese trading firms Sumitomo and Itochu. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-Australia’s Coronado to lift coal sales
US-Australia’s Coronado to lift coal sales
Sydney, 25 July (Argus) — US-Australian coal producer Coronado Coal will boost coal sales during July-December despite logistical challenges, as it maintains its output guidance of 16.4mn-17.2mn t for 2024. The firm sold 7.8mn t of coal during January-June, leaving it a target of 8.6mn t for July-December to meet the bottom of its 2024 guidance . It has maintained this guidance despite warning that shipments from its Australian Curragh mine will be affected by a two-week rail disruption from the end of July . Coronado operates the Curragh mine in Queensland and two mining complexes in the US' Virginia. All produce coking and thermal coal. Coronado's revenues were supported during April-June compared with January-March by a smaller discount for pulverised injection coal (PCI) against hard coking coal prices, which saw the PCI price rise while other metallurgical coal prices were under pressure. Its sales prices will remain strong in July-September, forecasts chief executive Douglas Thompson, on restocking in India and the rail disruption in Queensland, as well as the fire at Anglo American's Grosvenor mine that will disrupt Australian exports. Thompson warned that there was some downside risk of $5-10/t to Australian PCI pricing but if this was realised it will see China restart buying from Australia. In the long term he expects more competition from Russia-origin PCI, as Russian coal producers find new routes to the seaborne market and regain market share lost because of an European embargo. The premium for premium hard coal prices over PCI coal prices has shrunk to around $30/t from $145/t over the past six months. Argus last assessed the premium hard low-volatile price at $224/t fob Australia on 24 July and the PCI low-volatile price at $193.65/t. Coronado's group sales volumes were up 8.3pc to 4.1mn t in April-June compared with January-March , reflecting higher sales from its Australian and US operations. The increase in volumes combined with reduced need to remove waste materials allowed Coronado to cut is mining costs by 27.5pc from the previous quarter to an average of $91.10/t of coal sold. The firm expects costs to fall further in July-December as it demobilises more of its mining fleet at its Curragh mine. This reflects reduced waste removal and should have no impact of coal production at Curragh, Thompson said. Production at Curragh should increase in the second half of 2024, with 100,000t of coal production deferred from June to July because of heavy rainfall. By Jo Clarke Coronado Coal (mn t) Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 Jan-Jun '24 Jan-Jun '23 Sales (mn t) Australia (Curragh) 2.7 2.5 2.5 5.2 4.7 US 1.4 1.2 1.5 2.6 3.0 Total 4.1 3.7 4.0 7.8 7.6 Sales data % coking coal of total sales 81.0 78.7 76.0 79.9 75.3 Australian realised met coal price (fob) ($/t) 216.2 225.2 237.7 220.5 239.7 US realised met coal price (for) ($/t) 161.7 170.9 196.0 166.0 215.5 Source: Coronado Australian coal price comparisons ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more