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US inflation accelerates to 3.5pc pace in March

  • Market: Crude oil, Metals, Oil products
  • 10/04/24

The US consumer price index (CPI) accelerated to a 3.5pc annual pace in March, a sign the Federal Reserve is likely to hold its target lending rate at a 23-year high for longer in order to slow inflation to its long-range goal.

The CPI rose from a 3.2pc rate in February and was the highest since it reached 3.7pc in September, the Bureau of Labor Statistics reported today. So called core CPI, which strips out food and energy, rose at a 3.8pc rate, unchanged from the prior month. Food rose at a 2.2pc rate and energy rose at a 2.1pc pace. Shelter rose at a 5.7pc annual rate.

The CPI report reduced the probability that the US Federal Reserve will begin cutting its target rate at its June meeting to less than 20pc, futures markets showed on Wednesday, down from a greater than 57pc probability on Tuesday. The Fed last week signaled it was in no hurry to begin cutting borrowing costs amid stronger than expected economic data, even as it also suggested most members did expect cuts to begin later this year.

On a monthly basis, CPI rose by 0.4pc for a second month and core CPI rose by 0.4pc for a third month. Food rose by 0.1pc on the month and energy rose by 1.1pc, with gasoline up 1.7pc. The shelter index and gasoline index accounted for 50pc of the monthly gain in the headline CPI index, the bureau said.


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10/02/25

Trump seeks to end output of zinc-based penny

Trump seeks to end output of zinc-based penny

Houston, 10 February (Argus) — US president Donald Trump ordered the US Treasury Department to stop making the zinc-heavy penny, lamenting the coin's production costs, but any such effort may require more than just an executive directive. Trump on Sunday targeted the "wasteful" penny in a social media post, saying the US "for far too long" has minted the coin, "which literally cost us more than 2¢." The US Mint in its latest fiscal year lost $85mn producing pennies, with unit costs increasing by 20pc to 3.69¢ from 2023. Metal market participants do not expect a halt in penny production to materially reduce demand for zinc, which accounts for 97.5pc of the 1¢ piece's composition. Copper comprises the balance. "It doesn't take a whole lot of metal to make pennies," one source told Argus . The Mint shipped 3.2bn pennies last year, consuming 7,732 metric tonnes (t) in zinc from October-September. In contrast, the US imported 584,144t of unwrought zinc during the same timeframe. Tennessee-based Artazn, which provides the zinc blanks used in the Mint's penny production, did not respond to a request for comment. Conversely, the Mint lost nearly $18mn making nickels, which would become the lowest-denominated coin if Trump has his way. Unit costs for the 5¢ piece were higher than the penny's, increasing by 19pc to 13.78¢. Still, it remains unclear whether the president — through the Treasury — has the authority to unilaterally end circulation of the penny. The US Constitution gives Congress the exclusive power to "coin money" and determine values, but Treasury secretary Scott Bessent may be able to halt new minting until legislative action is taken. The Treasury and the Mint did not respond to requests for comment. Trump's efforts echo past attempts by his predecessors and other politicians to do away with the penny, but to no avail. Former president Barack Obama questioned the coin's function in 2013, and former Sen. John McCain and current Rep. Claudia Tenney (R-NY) filed bills in 2017 to suspend output for 10 years. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Nigeria Dangote targets full capacity within a month


10/02/25
News
10/02/25

Nigeria Dangote targets full capacity within a month

London, 10 February (Argus) — Nigeria's privately-owned 650,000 b/d Dangote refinery could reach maximum operating capacity within a month, according to sources with knowledge of the matter who said the plant touched 85pc of nameplate capacity at the end of January. The stated goal appears ambitious, with data from Kpler and Vortexa showing Dangote ran at an implied range of 395,000-430,000 b/d to date this month, which is between 61-66pc of capacity. The implied range was 350,000-400,000 b/d in January, or 54-62pc operating capacity. Argus pegged Dangote's crude receipts at 405,000 b/d in January, a record. Dangote runs may be boosted by upstream regulator NUPRC's decision in early February to ensure Nigeria's crude is supplied to meet domestic refinery demand, before it issues crude export permits. Routine maintenance at state-owned NNPC's 125,000 b/d Warri refinery could have made more domestic crude available for Dangote use. Crude allocations to Warri were cancelled and offered out to the wider market last week, according to a market participant. But this would have been a short-term measure, with a source saying the work at Warri was completed as of 9 February, and around 1.15mn bl of crude are scheduled to be pumped to the plant. Downstream regulator NMDPRA projected that Dangote will require 550,000 b/d of Nigerian crude grades for the period January–June 2025, while NNPC's 210,000 b/d Port Harcourt and 125,000 b/d Warri plants will require 60,000 b/d and 75,000 b/d, respectively. Nigeria produced 1.51mn b/d of crude in January, according to Argus' estimate. Warri restarted at the end of 2024, having been offline since 2019. Diesel loadings from the refinery have averaged eight trucks per day, sources said last week, with sufficient supply available to sustain ongoing truck load-out operations. Warri has not started producing gasoline, according to sources. By George Maher-Bonnett, Adebiyi Olusolape and Sanjana Shivdas Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Tantalite prices surge on DRC conflict


10/02/25
News
10/02/25

Tantalite prices surge on DRC conflict

London, 10 February (Argus) — International tantalite prices rose sharply over the past two weeks following renewed violence in the Democratic Republic of Congo (DRC) and the end of the lunar new year public holiday in China. Argus last assessed prices for minimum 25pc tantalite at $80-88/lb cif main ports on 6 February, up by around 8pc and in a larger range compared with $75-81/lb on 28 January. And prices are expected to continue to rise in the near term. The Argus index surged as Chinese consumers returned to the market after the lunar new year holiday with limited stocks, urgently looking to secure material from central Africa amid escalating conflict in eastern DRC. The M23 militant group took control of Goma in North Kivu province at the end of January, and has advanced towards Bukavu in South Kivu in recent days, despite announcing a ceasefire last week. An emergency summit of African leaders on 8 February urged all parties involved in the conflict to hold peace talks within five days and to open humanitarian corridors. M23 have captured or surrounded several mine sites for the 3T conflict minerals — tantalum, tungsten and tin — prompting local artisanal mining companies to flee and due diligence organisation ITSCI to withdraw from multiple territories in the region. Most recently, M23 took control of Nyabibwe town in South Kivu, close to the Nyabibwe tin mine. The extraction, transport, trade, handling and export of minerals produced at mines occupied by non-state armed groups goes against OECD guidelines for responsible mineral sourcing, which means most smelters and downstream original equipment manufacturers (OEMs) will not accept material mined in areas under M23 control. The rapid advance of M23 has prompted a push among mining firms to export material from DRC to avoid possible looting, market participants said. And banks in South Kivu are out of cash, further encouraging artisanal mining firms in the area to sell material quickly. Challenging year ahead M23's expansion in DRC has come at a time when global tantalite supply is already squeezed. The militant group's takeover of the mining town of Rubaya in May last year, a recognition dispute between ITSCI and the responsible minerals initiative, the implementation of the US' section 301 tariffs on Chinese tantalum products, and generally sluggish demand from the downstream electronics industry meant that many smelters worked through their stocks in 2024 and started this year with limited inventories. "Compared to last year, there's not much material sitting in the supply chain. 2024 was the year of decreasing inventory and now we are starting to pick up more units," a tantalite consumer said. OEMs and smelters have over the past year faced pressure from major technology companies such as Apple to cut Rwandan and DRC tantalite from the supply chain, because of the increased risk of mineral fraud. Some tantalite consumers have aimed to diversify their supply chains with material produced in other African countries including, Ethiopia, Mozambique and Sierra Leone. But political unrest has also disrupted supply from Mozambique in recent months, and much less material is available from other origins compared with mines in the Great Lakes region. "This is a challenging year for tantalum. We are facing very restricted supply chains," a consumer said. By Sian Morris Argus Tantalite Prices Feb 2025 $/lb Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico inflation slows to 4-year low in January


10/02/25
News
10/02/25

Mexico inflation slows to 4-year low in January

Mexico City, 10 February (Argus) — Mexico's consumer price index (CPI) eased to an annual 3.59pc January, the lowest in four years, as deceleration in agriculture prices offset faster inflation in energy and consumer goods prices. This marks the lowest annual inflation since January 2021 and a significant slowdown from July's annual peak of 5.57pc, which was driven by weather-impacted food prices. The result, reported by statistics agency Inegi on 7 January, was slightly below than the 3.63pc median estimate from 35 analysts polled in Citi Research's 5 February survey. It compares with the 4.21pc headline inflation in December, marking five months of declines in the past six months. Mexican core inflation, which excluded volatile energy and food, sped slightly to 3.66pc in January from 3.65pc in December, while non-core inflation decelerated to 3.34pc from 5.95pc the previous month. Movement, in the non-core, said Banorte, was mostly explained by a positive basis of comparison, and "will reverse as soon as the second half of February to push the headline metric above 4pc," said Banorte. Core inflation accelerated slightly to 3.66pc in January from 3.65pc in December, marking the second uptick after 22 consecutive months of deceleration. Services inflation slowed to 4.69pc from 4.94pc, while consumer goods inflation ticked up to 2.74 from 2.4pc. Non-core inflation slowed sharply to 3.34pc from 6.57pc in December. This was largely due to base effects, Banorte said, adding these base effects are likely to fade this month to speed headline annual inflation back above 4pc. The base effects most clearly impacted fruit and vegetable price inflation, contracting 7.73pc in January from 6.65pc annual inflation the previous month. Moving forward, agriculture prices are highly exposed to the coming hot, dry season in Mexico, with the La Nina climate phenomenon, adding a layer of uncertainty. Meanwhile, energy inflation accelerated to 6.34pc in January from 5.73pc the previous month, driven by higher LPG prices. Electricity inflation, meanwhile, sped to 4.32pc in January from 2.65pc in December, while inflation slowed to 0.02pc in January for domestic natural gas prices from 5.67pc in December. Monetary policy The January inflation report followed the central bank's decision Thursday to reduce its target interest rate to 9.50pc from 10pc. This was the bank's sixth rate cut since March 2024, winding down from 11.25pc. The 4-1 decision marked an acceleration in the current rate cycle, opting for a half-point reduction rather than the previous five 25-basis-point cuts. In board comments with the announcement, the bank cited "significant progress in resolving the inflationary episode derived from the global shocks" in 2021 and 2022. These triggered rate hikes from 4pc in June 2021 to 11.25pc in April 2022, the target rate's historic high. Taking into account the "country's weak economic activity" and this progress in reducing inflation, the board said it would "consider adjusting [the target] by similar magnitudes" at upcoming meetings. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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German heating oil demand surges as prices fall


10/02/25
News
10/02/25

German heating oil demand surges as prices fall

Hamburg, 10 February (Argus) — German consumers stocked up on heating oil in the first week of February as prices fell. Traded heating oil volumes reported to Argus jumped by almost a third on the week, and prices fell by almost €2/100l on average nationwide between 3 February and 6 February. Many consumers had held off from buying in the week before to see if prices would drop, traders said. Consumers were further spurred on by a drop in temperatures after a relatively mild January. Privately owned heating oil tanks nationwide reached their lowest level since the beginning of July on 6 February at just over 52pc, Argus MDX data show. Industrial diesel tanks were lower in January than in the previous five years. Diesel demand is still low, traders said. In the first six weeks of 2025, diesel volumes reported to Argus dropped marginally and imports have remained largely unprofitable. Production cuts in southern Germany have yet to lead to any significant product shortages, with domestic supply sufficient to cover demand. Both the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery in Bavaria and the Miro joint venture's 310,000 b/d Karlsruhe refinery continue to produce at reduced levels. They shut down portions of their production within days of each other because of technical problems. Production at Karlsruhe is not expected to return to normal levels until the beginning of March, a departure from the original schedule which saw production increase again in mid-February. Overall production is due to remain reduced in March even with the increase in Karlsruhe, however. The 125,000 b/d Vohburg site of the Vohburg-Neustadt refinery will be taken offline entirely for maintenance works, along with several units in the 90,000 b/d Neustadt site, which has yet to resume production after a fire on 17 January. OMV plans to take its 77,000 b/d Burghausen refinery in Bavaria offline for maintenance works at the end of March. The first of two permanent production cuts scheduled for 2025 will take place in March, when Shell will cease crude distillation at the Wesseling site of its 334,000 b/d Rhineland refinery complex. The second permanent cut is due for the end of the year at BP's 258,000 b/d Gelsenkirchen refinery in west Germany. BP said on 6 February it is seeking a buyer for the refinery, and said it will go ahead with the planned reduction in crude capacity nonetheless. By Natalie Müller Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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