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Milei's bid to open Argentina's economy passes

  • Market: Crude oil, Fertilizers, Metals, Natural gas
  • 30/04/24

Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities.

The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development.

The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country.

Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles.

Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress.

Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation.

Approval of the package includes several articles the administration says will open the door to major investments in the energy sector.

Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG.

The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment.

Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development.

The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008.


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13/02/25

DeepSeek AI integration to boost long-term metal demand

DeepSeek AI integration to boost long-term metal demand

Beijing, 13 February (Argus) — Increasing integration of DeepSeek's artificial intelligence (AI) models in China is likely to boost long-term demand for metals used in AI infrastructures and products, according to market participants. China's three largest telecommunications companies — China Mobile, China Unicom and China Telecom — have integrated DeepSeek's open source models, and provided exclusive computing power solutions and supporting environments for the DeepSeek-R1 model to help release the performance of the model, the country's industry and information technology ministry said on 9 February. Other major Chinese technology firms including Alibaba, Baidu and Tencent have also announced integration of DeepSeek's models into their cloud platforms. This is likely to accelerate these companies' development of intelligent applications. The country's largest electric vehicle (EV) maker BYD, which sold around 4.2mn EVs last year in China, on 11 February announced plans to integrate software from DeepSeek into 21 of its EV models, enabling the automaker to offer advanced autonomous driving features on all of its 18 models priced above 100,000 yuan ($13,686). DeepSeek's models offer performance for a low price, with its training cost reportedly significantly lower than other large language models. It provides responses comparable to other contemporary large language models, such as OpenAI's GPT-4o. The roll-out of DeepSeek's models is expected to provide low-cost, high-efficiency intelligent services for small and medium-sized companies and individual users, reduce the threshold for the use of AI technology, and accelerate the inclusion of AI technology. Metals demand This development is also likely to boost long-term demand for metals, particularly copper, aluminum, tungsten, molybdenum, gallium, germanium, battery metals and rare earths. AI operations rely on a large number of servers and data centres, with copper widely used in power distribution, grounding and interconnection of the data centres. Global copper demand from data centres is projected to exceed 1mn t by 2026, according to industry estimates. Rapid development of the AI industry is also boosting copper demand in grid systems. Aluminum is used in some cooling and structural components of data centres. Demand for indium phosphide (inP) photonic integrated circuit (PiC) technology from the data centre industry is also growing rapidly, driven by the heavy computing workloads required to support AI. AI growth and data centre demand is also expected to increase the use of compound semiconductor materials including gallium nitride and gallium arsenide. Molybdenum and tungsten can be used to manufacture high-temperature components and electrode materials used in some high-end AI hardware equipment. Rare earth metals also have key applications in AI-related magnetic and optical materials. A faster development of AI products has the potential to increase demand for neodymium iron and boron (NdFeB) material used in special micro-motors and servo motors, rare earth polishing powder used in wafer devices and rare earth magnets used in audio products. Some main domestic smartphone manufacturers such as Huawei, Honor and Oppo have also integrated DeepSeek's services into their products. This is likely to accelerate the development and consumer adoption of AI smartphones. Earlier industry estimates showed that shipments of AI smartphones would rise to 550mn units globally in 2027, making up more than 40pc of total phone shipments. About 30pc of cobalt and 7pc of global lithium production is consumed in the consumer electronics industry. Challenges DeepSeek's development is facing challenges outside China. The DeepSeek application was removed from Italy's app store in January owing to alleged data security concerns. Australia has banned the use of DeepSeek's technology on all government devices. Japanese companies such as Toyota, Mitsubishi and SoftBank have banned the use of DeepSeek for "information security issues". Texas in February became the first US state to ban the use of DeepSeek on government equipment. But the western countries' anxiety about DeepSeek may spur the development of their own AI industries. US president Donald Trump said that DeepSeek was a "wake-up call" for the US technology industry. South Korea's acting president Choi Sang-moo views DeepSeek as a "new impact", planning to pour 34 trillion won ($23.5bn) into the development of the AI and semiconductor industries. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Better Opec+ compliance narrowing supply surplus: IEA


13/02/25
News
13/02/25

Better Opec+ compliance narrowing supply surplus: IEA

London, 13 February (Argus) — The IEA said today that the Opec+ alliance's improving compliance with agreed crude production targets is "slowly chipping away" at its projected supply surplus this year. In its latest Oil Market Report (OMR), the Paris-based agency again lowered its forecasted surplus for this year, this time by 270,000 b/d to 450,000 b/d. This is the agency's third consecutive downgrade since November, when it saw 2025 supply outstripping demand by 1.15mn b/d. These forecasts are subject to change. With data now "largely complete" for 2024, the agency's balances show supply matching and demand exactly at 102.9mn b/d. This is a long way off the 800,000 b/d supply surplus the IEA forecast for 2024 this time last year. Opec+ is implementing three sets of crude production cuts, and is scheduled to start unwinding one of these — totalling 2.2mn b/d — starting in April. A recent meeting of the group's key producers signalled no change to this plan . The IEA continues to assume all Opec+ cuts will remain in place this year. But the agency said that should production return as planned, this would add 430,000 b/d to its 2025 supply forecast. Aside from Opec+, there are other key supply uncertainties this year. These range from new US sanctions targeting Russian and Iranian oil exports to US tariffs on some of its key trading partners. "It is still too early to tell how trade flows will respond to new US tariffs or the prospect thereof, and what the impact of the escalation of sanctions on Iran and Russia may be in the longer run," the IEA said. As thing stand, the IEA sees global oil supply growing by 1.56mn b/d this year to 104.45mn b/d, compared with growth of 1.76mn b/d projected in its January report. This slower growth was largely driven by Opec+, which the agency now sees supplying 170,000 b/d less than previously thought this year. It also noted a 950,000 b/d fall in global oil supply in January, "with extreme cold weather hitting North American supply, compounding large declines in Nigerian and Libyan production." On demand, the agency upgraded its growth forecast this year by 50,000 b/d to 1.1mn b/d. It sees oil demand at 104mn b/d in 2025, driven by "a minor pickup in GDP growth and lower oil prices as per the current forward curve." The IEA said global observed oil stocks fell by 17.1mn bl in December. Crude stocks fell by 63.5mn bl and products stocks rose by 46.4mn bl. It said preliminary data show global stocks falling by 49.3mn bl in January, led by large draw in China. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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India’s Fact issues tender to buy phosacid


12/02/25
News
12/02/25

India’s Fact issues tender to buy phosacid

London, 12 February (Argus) — Indian fertilizer importer and producer Fact has issued a tender to buy up to 12,000t of phosphoric acid, closing on 18 February. Fact is seeking phosphoric acid containing 46-53pc P2O5 for laycan during 20 March-10 April and shipment to Kochi on India's southwest coast. Offers are to be valid for seven days after opening and will include 30 days' credit. Offers will be given as a premium or discount to the first-quarter phosphoric acid contract price of $1,055/t P2O5 cfr India. By Tom Hampson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico factory output dips 1.4pc in December


12/02/25
News
12/02/25

Mexico factory output dips 1.4pc in December

Mexico City, 12 February (Argus) — Mexico's industrial production fell 1.4pc in December from the previous month with broad weakness across multiple sectors on tariff uncertainty and weak domestic demand. The result marks the largest monthly decline of 2024 and was weaker than the 1pc decline forecast by Mexican bank Banorte. It followed a nearly flat reading in November. Trade uncertainty and low domestic demand weighed on industrial production in December, said Banorte, with industry "sluggishness" likely through mid-2025. Manufacturing, which represents 63pc of Inegi's seasonally adjusted industrial activity indicator (IMAI), decreased by 1.2pc after rising 0.7pc in November. Transportation equipment manufacturing output, which comprises 24pc of the manufacturing component, has fluctuated in recent months, falling 6.4pc in December after a 3.6pc uptick in November and a 4.4pc decline in October. Despite this, Mexico's auto sector achieved record annual light vehicle production and exports in 2024. However, Mexican auto industry associations confirm investment in the sector has begun to slow on uncertainty tied to concerns over potential US tariffs and slow economic growth in 2025. Taking the base case that tariffs do not materialize, Banorte expects manufacturing to rebound in the second half of the year as uncertainty lifts and interest rates fall with rate cuts at the central bank. Mining, which makes up 12pc of the IMAI, was lower by 1pc in December, following a 0.5pc increase in November. The decline was again driven by the oil and gas production, falling by 2.5pc in December to mark a sixth consecutive monthly decline for hydrocarbons output. Construction, representing 19pc of the IMAI, contracted by 2.1pc in December with setbacks in all categories. This matched the November result, with Inegi recording declines in construction in five of the last seven months. From a year prior, industrial production fell by 2.4pc in December , while manufacturing fell by 0.3pc and construction declined by 7.1pc in December. Mining was down by 6.2pc. B y James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Italy mulling changes to EU gas stock targets: Boschi


12/02/25
News
12/02/25

Italy mulling changes to EU gas stock targets: Boschi

London, 12 February (Argus) — Italy is exploring the idea of lower EU gas storage targets, but no decisions have yet been made, the energy chief at Italy's environment and energy security ministry told Argus . A decision on whether to scrap, change or renew the EU rules implemented in 2022 that required a 90pc EU stockfill on 1 November last year and require the same this coming November could be taken in the coming weeks, energy department head Federico Boschi said. "The [existing] stockfill obligations end on 31 December 2025 and as such, there is space for either a halt, a change or an extension," Boschi said, without specifying whether Italy might advocate for a lower target on 1 November 2025 or beyond, or both. Asked whether Italy was seeking a capacity target for gas storage injections, Boschi said the government had also not yet taken a position. "As far as I know, we have no specific target in mind," he said. Filling storage capacity would benefit energy security, but it could also affect prices and favour speculation by increasing demand when it might otherwise be low, Boschi said. The EU stockfill regulations aim to ensure adequate winter gas reserves. But European summer-winter gas price spreads remain inverted out several years, providing no incentive to book storage capacity during that time. PSV summer 2025 prices closed €4.81/MWh above the winter 2025-26 contract on Tuesday. Seasonal contracts on Argus Italian curve do not extend beyond that, but EU benchmark Dutch TTF summer-winter spreads for storage years 2026-27 and 2027-28 closed at +€2.805/MWh and +€0.20/MWh, respectively, on Tuesday. Italy — the EU member with the second-largest storage capacity after Germany — has been looking at a raft of options to curb energy prices for businesses and households, which are among the highest in Europe. The Italian government approved legislation last week to bring forward storage auctions for the 2025-26 year to allow the market to book capacity if price spreads become favourable in February-March. Italian storage operator Stogit plans to offer 2.5bn m³ of capacity starting from 1 April across products lasting 1-5 years on 17 February-19 March. Compatriot storage operator Edison Stoccaggio plans to offer around 900mn m³ of 2025-26 capacity, but has yet to announce auction dates. In any event, the EU's Gas Co-ordination Group is scheduled to meet on Thursday and may discuss gas storage targets. By Stephen Jewkes and Jeff Kuntz Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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