US inflation slows broadly in April

  • Market: Crude oil, Metals
  • 15/05/24

US consumer price gains eased in April, with core inflation posting the smallest gain in three years, signs the economy is slowing in the face of high borrowing costs.

The consumer price index (CPI) rose by an annual 3.4pc in April, easing from 3.5pc over the prior 12-month period, the Labor Department reported on Wednesday. Core CPI, which strips out volatile food and energy, rose by 3.6pc, slowing from 3.8pc the prior month.

The easing inflation comes as the Federal Reserve has pushed back the expected start of interest rate cuts after holding its target rate at a 23-year high since July 2023 as the US economy has continued to grow and generate jobs at greater than expected rates. Job growth however slowed to 175,000 in April, the lowest since October 2023, and job openings and wage gains have also slowed while a measure of manufacturing has contracted.

The CME FedWatch tool boosted the probability of Fed rate cuts in September to about 72pc today from about 65pc on Tuesday.

The energy index rose by 2.6pc over the 12 months ended in April, accelerating from 2.1pc. The gasoline index slowed to an annual 1.2pc in April from 1.3pc

The food index rose by an annual 2.2pc, matching the prior month. Shelter slowed to 5.5pc from 5.7pc.

Services less energy services slowed to 5.3pc from 5.4pc. Transportation services accelerated to an annual 11.2pc, led by insurance costs, from 10.7pc in the 12 months through March.

On a monthly basis, CPI inflation slowed to 0.3pc in April from 0.4pc the prior two months. Core inflation slowed to 0.3pc from 0.4pc the prior three months. Energy held flat at a monthly 1.1pc.

Services less energy services slowed to a monthly 0.4pc gain from 0.5pc.


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17/05/24

Houston refiners weather hurricane-force winds: Update

Houston refiners weather hurricane-force winds: Update

Adds Calcasieu comment, update on flaring reporting Houston, 17 May (Argus) — Over 2mn b/d of US refining capacity faced destructive winds Thursday evening as a major storm blew through Houston, Texas, but the damage reported so far has been minimal. Wind speeds of up to 78 mph were recorded in northeast Houston and the Houston Ship Channel — home to five refineries with a combined 1.5mn b/d of capacity — faced winds up to 74 mph, according to the National Weather Service . Further South in Galveston Bay, where Valero and Marathon Petroleum refineries total 818,000 b/d of capacity, max wind speeds of 51 mph were recorded. Chevron's 112,000 b/d Pasadena refinery on the Ship Channel just east of downtown Houston sustained minor damage during the storm and continues to supply customers, the company said. ExxonMobil's 564,000 b/d Baytown refinery on the Ship Channel and 369,000 b/d Beaumont, Texas, refinery further east faced no significant impact from the storm and the company continues to supply customers, a spokesperson told Argus . Neither Phillips 66's 265,000 b/d Sweeny refinery southwest of Houston nor its 264,000 b/d Lake Charles refinery 140 miles east in Louisiana were affected by the storm, a spokesperson said. There was no damage at Motiva's 626,000 b/d Port Arthur, Texas, refinery according to the company. Calcasieu's 136,000 b/d refinery in Lake Charles, Louisiana, was unaffected by the storm and operations are normal, the refiner said. Marathon Petroleum declined to comment on operations at its 593,000 b/d Galveston Bay refinery. Valero, LyondellBasell, Pemex, Total and Citgo did not immediately respond to requests for comment on operations at their refineries in the Houston area, Port Arthur and Lake Charles. A roughly eight-mile portion of the Houston Ship Channel from the Sidney Sherman Bridge to Greens Bayou closed from 9pm ET 16 May to 1am ET today when two ships brokeaway from their moorings, and officials looked in a potential fuel oil spill, according to the US Coast Guard. The portion that closed provides access to Valero's 215,000 b/d Houston refinery, LyondellBasell's 264,000 b/d Houston refinery and Chevron's Pasadena refinery. Emissions filings with the Texas Commission on Environmental Quality (TCEQ) are yet to indicate the extent of any flaring and disruption to operations in the Houston area Thursday evening, but will likely be reported later Friday and over the weekend. Gulf coast refiners ran their plants at average utilization rates of 93pc in the week ended 10 May, according to the Energy Information Administration (EIA), up by two percentage points from the prior week as the industry heads into the late-May Memorial Day weekend and beginning of peak summer driving season. The next EIA data release on 22 May will likely reveal any dip in Gulf coast refinery throughputs resulting from the storm. By Nathan Risser Houston area refineries Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Houston area refiners weather hurricane-force winds


17/05/24
News
17/05/24

Houston area refiners weather hurricane-force winds

Houston, 17 May (Argus) — Over 2mn b/d of US refining capacity faced destructive winds Thursday evening as a major storm blew through Houston, Texas, but the damage reported so far has been minimal. Wind speeds of up to 78 Mph were recorded in northeast Houston and the Houston Ship Channel — home to five refineries with a combined 1.5mn b/d of capacity — faced winds up to 74 Mph, according to the National Weather Service . Further South in Galveston Bay, where Valero and Marathon Petroleum refineries total 818,000 b/d of capacity, max wind speeds of 51 Mph were recorded. Chevron's 112,000 b/d Pasadena refinery on the Ship Channel just east of downtown Houston sustained minor damage during the storm and continues to supply customers, the company said. ExxonMobil's 564,000 b/d Baytown refinery on the Ship Channel and 369,000 b/d Beaumont, Texas, refinery further east faced no significant impact from the storm and the company continues to supply customers, a spokesperson told Argus . Neither Phillips 66's 265,000 b/d Sweeny refinery southwest of Houston nor its 264,000 b/d Lake Charles refinery 140 miles east in Louisiana were affected by the storm, a spokesperson said. There was no damage at Motiva's 626,000 b/d Port Arthur, Texas, refinery according to the company. Marathon Petroleum declined to comment on operations at its 593,000 b/d Galveston Bay refinery. Valero, LyondellBasell, Pemex, Total, Calcasieu and Citgo did not immediately respond to requests for comment on operations at their refineries in the Houston area, Port Arthur and Lake Charles. A roughly eight-mile portion of the Houston Ship Channel from the Sidney Sherman Bridge to Greens Bayou closed from 9pm ET 16 May to 1am ET today when two ships brokeaway from their moorings, and officials looked in a potential fuel oil spill, according to the US Coast Guard. The portion that closed provides access to Valero's 215,000 b/d Houston refinery, LyondellBasell's 264,000 b/d Houston refinery and Chevron's Pasadena refinery. By Nathan Risser Houston area refineries Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Trade curbs spur Chinese battery firms to look overseas


17/05/24
News
17/05/24

Trade curbs spur Chinese battery firms to look overseas

Beijing, 17 May (Argus) — An increasing number of Chinese battery firms have accelerated their expansions outside China, to meet buoyant overseas demand and to tackle escalating geopolitical curbs. These curbs include the US' newly announced tariff hikes on China's electric vehicles (EVs) and batteries from 2024 or 2026, and the EU's potential punitive duties on battery EVs originating from China. The US' Inflation Reduction Act (IRA) and the EU's Critical Raw Material Act have also prompted many Chinese battery material producers to step up their overseas expansions. China's battery material manufacturer Hunan Zhongke Electric has unveiled a plan to invest no more than 5bn yuan ($692mn) to build a production plant for battery anode material in Morocco, in which some other Chinese firms have also invested in similar projects. The plant has a designed capacity of 100,000 t/yr and will be developed in two phases with 50,000 t/yr each. The firm aims to complete plant construction for each phase in 24 months. Zhongke is a major battery anode material producer in China with 210,000 t/yr of capacity as of the end of 2023. Its output of anode materials rose to 143,513t in 2023, up by 14pc from 125,460t a year earlier, driven by the country's rising EV sales. It aims to expand overseas sales in the coming years. Major Chinese copper producer Zhejiang Hailiang also outlined a plan to build a 25,000 t/yr production plant for copper foil used in lithium-ion batteries in Morocco. Construction will take 36 months. "The layout of the Morocco project can help us penetrate into the European and US markets as soon as possible as exports from Morocco are duty free to these markets," Hailiang said. "This will help us avoid any international trade barrier." Morocco is one of the main destinations for Chinese companies to invest in and build overseas battery component plants given its abundant resources for phosphate, a main chemical compound in a lithium iron phosphate battery, and its free trade agreement (FTA) with the US. It is also a major cobalt metal producing country outside China, with cobalt being a critical mineral used in the manufacturing of lithium-ion batteries. Major Chinese battery material producer EVE Energy is on track to develop a production project for energy storage batteries in Malaysia. It will establish a subsidiary EVE Energy Malaysia Energy Storage to develop this project to meet Malaysia's energy storage battery demand, although it has not disclosed the capacity, construction schedules and launch dates. The plant is the second phase of EVE's new energy products development in Malaysia. It in August 2023 started building a plant for cylindrical batteries mainly used in electric two-wheelers and electric tools in the southeast Asian country. The firm said the US' new tariff hikes will not affect its business because it had planned the Malaysia projects for consumer batteries and energy storage in advance, and these projects will support shipments to US consumers by 2026. New US tariff hikes US president Joe Biden's administration announced on 14 May that the tariff on lithium-ion EV batteries will immediately increase to 25pc, while the tariff on all other lithium-ion batteries is set to increase to 25pc in 2026, both from the current rate of 7.5pc. This is likely to trigger more Chinese battery companies to increase their overseas investments to avoid the tax, according to industry participants. The US' tariff hikes have drawn strong criticism from China. "Politicising and instrumenting economic and trade issues is typical political manipulation," said the country's ministry of commerce. "The Section 301 tariff hikes goes against President Biden's promise of 'not seeking to contain China's development' or 'not seeking to break the chain of decoupling from China'. The US should immediately correct its wrongful actions and cancel the tariffs. China will take 'resolute" measures to safeguard its own rights and interests'." Chinese battery firms' investments in Morocco Company Products Capacity Launch dates CNGR CAM precursors, LFP, black mass 120,000 t/yr, 60,000 t/yr, 30,000 t/yr 4Q, 2024 BTR CAM 50,000 t/yr N/A Hunan Zhongke Anode material 100,000 t/yr in 24 months Huayou Cobalt/LG LFP 50,000 t/yr in 2026 Huayou Cobalt/LG Lithium salts 52,000 t/yr N/A Sichuan Yahua/LG Lithium hydroxide N/A N/A Hailiang Li-ion battery copper foil 25,000 t/yr in 36 months Source: Company releases Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Texas barge collision shuts GIWW section: Correction


16/05/24
News
16/05/24

Texas barge collision shuts GIWW section: Correction

Corrects volume of oil carried by barge in fourth paragraph. Houston, 16 May (Argus) — Authorities closed a six-mile section of the Gulf Intracoastal Waterway (GIWW) near Galveston, Texas, because of an oil spill caused by a barge collision with the Pelican Island causeway bridge. The section between mile markers 351.5 and 357.5 along the waterway closed, according to the US Coast Guard. A barge broke away from the Philip George tugboat and hit the bridge between Pelican Island and Galveston around 11am ET today. Concrete from the bridge fell onto the barge and triggered an oil leak. The barge can hold up to 30,000 bl oil, but it was unknown how full the barge was before the crash, Galveston County county judge Mark Henry said. It was unclear when the waterway would reopen. An environmental cleanup crew was on the scene along with the US Coast Guard and Texas Department of Transportation to assess the damage. Multiple state agencies have debated the replacement of the 64-year-old bridge for several years, Henry said. The rail line alongside the bridge collapsed. Marine traffic does not pass under the bridge. By Meghan Yoyotte Intracoastal Waterway at Galveston Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Dangote seeks 2mn bl/month WTI crude for 12 months


16/05/24
News
16/05/24

Dangote seeks 2mn bl/month WTI crude for 12 months

London, 16 May (Argus) — Nigeria's 650,000 b/d capacity Dangote refinery has issued a tender for the supply of 2mn bl of US WTI crude each month, for 12 months starting in July, according to a tender document seen by Argus . Dangote will accept offers on a delivered cif basis to Lekki, Nigeria, and on a fob basis from Houston and Corpus Christi, Tx. It was not stated whether the fob offers would be against WTI or Brent. The tender closes on 21 May. Dangote came online at the end of 2023 and its throughout capacity is planned to reach around 350,000 b/d a its first phase of operations. The refinery received its first crude cargo on 6 December and since then deliveries have averaged 179,000 b/d, according to data from Vortexa. Light sweet WTI accounted for 42,000 b/d, or 23pc of the total. By Lina Bulyk and Kuganiga Kuganeswaran Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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