US inflation edges down on energy, food costlier
US consumer prices rose at an annual rate of 8.3pc in August, a tick lower than the prior month as food prices hitting new highs partially offset easing energy costs.
The increase last month compared with an 8.5pc gain in the 12 months through July, the Bureau of Labor Statistics (BLS) reported today. It marked a second month of slowing from this year's peak at 9.1pc in June, which was the highest inflation in four decades. Still, the August number was higher than most economists' forecasts.
The energy index rose by 23.8pc in September, down from the 32.9pc gain in the prior 12-month period. The food index rose by 11.4pc over the past year, the largest 12-month increase since the period ending May 1979.
The Federal Reserve has embarked on a course of steep rate increases and is expected to hike its target rate by 75 basis points next week, its third such consecutive increase. It has vowed to quash inflation, even while warning that would come with "some pain" for consumers and businesses.
All items less food and energy — so-called core inflation — rose by 6.3pc in August from a year earlier, up from 5.9pc in the prior two months and a sign of ongoing inflationary pressures.
On a seasonally adjusted basis, the consumer price index rose 0.1pc in August after being unchanged in July. All items less food and energy rose 0.6pc in August after a 0.3pc gain in July and a 0.7pc gain in June. The energy index fell by 5pc in August after a 4.6pc decline in July, while the gasoline index fell by 10.6pc in August after a 7.7pc decline in July and an 11.2pc gain in June.
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Libya blockade pushes European buyers to other crudes
Libya blockade pushes European buyers to other crudes
London, 20 September (Argus) — Libya is still exporting crude nearly a month after its eastern-based administration imposed a blockade on oil fields and terminals, but a significant reduction in loadings has prompted key European customers to turn to alternative grades. Libya exported around 389,000 b/d of crude in the 1-19 September period, according to Argus tracking data, a sharp drop from 932,000 b/d during the same period in August when Libya's pre-blockade crude output was close to 1mn b/d. Assuming Libya is keeping some crude for domestic refining and power generation, current production may now be closer to 500,000 b/d — up from previous Argus estimates of around 300,000 b/d . The September exports are largely occurring under state-owned NOC's crude-for-products programme. This potentially bypasses the central bank, which has been at the centre of the political impasse that sparked the blockade . Nearly half of Libyan loadings so far this month, or 189,000 b/d, have headed to Italy, according to Argus tracking. But Italy's Libyan intake averaged 329,000 b/d over January-August, so the country has sought alternatives to replace the shortfall this month. Two cargoes of Algeria's light sweet Saharan Blend amounting to 67,000 b/d arrived in Italy in the 1-19 September period, after no cargoes in August and just one in July. Exports of Caspian light sour CPC Blend to Italy have jumped to 561,000 b/d so far this month, up from 410,000 b/d over 1-19 August and 520,000 b/d over 1-19 July, according to port reports. Availability of CPC Blend was constrained in August by maintenance at Kazakhstan's 600,000 b/d Tengiz field. Around 92,000 b/d of Libyan crude headed for Spain in the first eight months of this year, but none has loaded for the country so far in September. Exports of CPC Blend to Spain rose to 96,000 b/d over 1-19 September, up on the 37,000 b/d shipped during the same periods in each of August and July. By Melissa Gurusinghe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Northvolt's future unclear as Sweden rejects stake
Northvolt's future unclear as Sweden rejects stake
London, 20 September (Argus) — The future of Swedish battery and cathode active material (CAM) producer Northvolt is unclear after the country's Prime Minister Ulf Kristersson confirmed this week that the government will not invest in the company. Northvolt has had to cut back its expansion plans because of challenging macroeconomic and market conditions. Northvolt's difficulties were thrown into the spotlight last week when chief executive and co-founder Peter Carlsson said the company will scale back its expansion plans for a second CAM factory in Borlange, Sweden – a facility that is intended to help ease regional dependence on imports from China which currently accounts for over 70pc of global CAM production, according to the IEA. The adjustment at Borlange is one of several setbacks at Northvolt, whose Skellefteå factory in the far north of Sweden delivered less than 1GWh of battery production last year – enough to power around 20,000 cars and far below the plant's nameplate capacity of 16GWh. Back in June, German carmaker BMW pulled out of a €2bn ($2.2bn) order, albeit just 4pc of Northvolt's order book of $55bn, according to its 2022 annual report – underscoring the slowdown in European demand for electric vehicles (EVs) and therefore battery materials. Carlsson maintains that the "long term outlook for cell manufacturers — including Northvolt — is strong", despite the "challenging macroeconomic environment." And while the Swedish government has declined to invest, Northvolt did receive a €5bn ($5.58bn) loan in January — the largest loan raised by a climate tech firm in Europe to date, along with €942mn from the European Investment Bank (EIB). Overall, the company has received around €15bn ($16bn) of investments to date — in debt and equity — since its founding in 2017 by two former Tesla executives, comfortably making it Europe's best-funded start-up, ahead of fintech firm Klarna at $4.6bn. However the road ahead is challenging and costly, and additional support will be needed. "Northvolt haven't gone under but are not going to produce any CAM material until 2026 at the earliest, so difficult times, the EU needs to step up and support," a market participant commented. The scale of growth and support being given to China's battery and electric vehicle (EV) sectors is also compounding the difficulties raising investment for European projects. China accounted for 83pc of global battery production last year, according to the IEA, and subsidy-funded EV manufacturers CATL and BYD have continued to expand capacity this year (see graph). China has subsidised its EV industry to the tune of around $230bn between 2007 and 2023, including $45bn last year, according to a study by the Centre for Strategic and International Studies (CSIS). "This scares off the capital from the [European] battery market. It takes a full reassessment of the industry, which takes a long time. Capital is not cheap and rate cuts are only coming in now, so it will be a while," another market participant said. China's battery dominance continues to hamper Europe "This narrative is bigger than Northvolt – Asian manufacturers generally and Chinese manufacturers specifically are in the lead, very clearly", said Jeffrey Chamberlain, chief executive of US-based venture fund Volta Energy Technologies. "The idea that a start-up can catch up and manufacture cells, of equal or better quality at volume, might have been viable 10-15 years ago, but it is increasingly becoming incredibly challenging," Chamberlain said, arguing that western firms at all stages of the supply chain should sign joint ventures with China instead of engaging in direct competition, offering access to their markets with local manufacturing as well as "innovation for next-generation products". Despite recent setbacks, Northvolt has not revised its goal of building four large factories before the end of the decade in Sweden, Germany and Canada – remaining committed to a scale of ambition that is drawing concern from some industry participants. "The only way for success now is through strategic alliances, just look at InoBat and Gotion," said Ben Kilbey, former director at Britishvolt. "[It] feels like recent history repeating [itself]. Britishvolt was advised that it could make a battery factory in two global locations (UK and Canada) before it had made a single cell […] Now Northvolt is in a pickle and having to scale back its global, vertical integration, ambitions. And it's had around €15bn thrown at it," Kilbey added. Chinese companies have outlined lithium-ion battery manufacturing capacity for next year that far exceeds expected demand (see graph), which may further weigh on prices for component materials, squeezing the margins of any manufacturers of these materials outside China such as Northvolt. By Chris Welch Global EV battery installations, by supplier GWh Announced lithium-ion battery manufacturing capacity and demand in 2025 GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Overprotectionism harmful for EU stainless: Marcegaglia
Overprotectionism harmful for EU stainless: Marcegaglia
London, 20 September (Argus) — Trade barriers and a focus on protectionist measures alone will not save Europe's increasingly uncompetitive stainless steel industry and have the potential to accelerate deindustrialisation, according to major Italian steelmaker Macegaglia chief executive Antonio Marcegaglia. Speaking on the sidelines of the International Stainless and Special Steel Conference held in Rome this week, Marcegaglia said that an overdose of such measures threatens to reduce long-term demand while incentivising the import of steel-containing finished goods. "While trade measures for correcting unfair international competition are welcomed, this is not beneficial if you think about the whole value chain," he said. "We have seen that despite high duties and safeguards, competition from imports has only increased." Europe's stainless steel sector is under heavy pressure from decreasing demand and growing costs. EU sales of stainless steel producers declined by 26.7pc year on year in 2023 to €16.44bn, with 2024 sales due to decline by a further 18pc to €13.44bn, according to Marcegaglia data. Delegates surveyed by Argus at the conference agreed the industry is severely struggling, with 2024 revenues likely to be below the pre-Covid year of 2019. On the costs side, Marcegaglia said that while Europe already has the challenge of higher energy, labour, transport and capital costs relative to Asia, more recent hikes to key raw material costs have effectively made it uncompetitive on all fronts. The availability of stainless steel scrap is getting tighter in the EU despite the fall in steel production, which together with high ferro-alloy prices has increased volatility for producers. A rising trend of upstream integration among Asian producers has increased their ability to control the costs of their key input, nickel pig iron, causing European scrap to become expensive relative to Asian NPI. Battling an unfavourable cost structure and lower scrap availability, European producers moved to start importing NPI in large volumes this year, despite its environmentally unfriendly nature relative to scrap. Europe's NPI imports from Indonesia equated to 10,000t of nickel metal content in January-July, moving up from zero in 2023, according to Red Door Research managing director Jim Lennon. "The reason for NPI inflows [into Europe] was the differential between the stainless scrap price and NPI," Lennon said at the conference. "NPI was cheaper than stainless steel scrap and so it was a big incentive to bring NPI into the supply chain." Marcegaglia said decarbonisation is a challenge for the European industry given the region is now wholly cost uncompetitive, and suggested the industry agree on green premiums to share CO2 related costs. "Given Europe's already high scrap utilisation, efforts for further improvements are complex and costly," he said. "The steel industry has to balance between environmental and economic sustainability." Delegates at the conference agreed decarbonisation will have to take a back seat as the European industry as a whole focuses on survival. "As far as 2030 net-zero goals are concerned, you can forget about them," industry equipment supplier Alfa Laval Technologies global sourcing manager and supplier development manager Marcus Lindholm said. Marcegaglia said that a possible pathway to recovery for the beleaguered industry is through the pursuit of supply chain co-operation, as current fierce competition between EU players is compounding its profitability problems. The group is strategically looking at further opportunities for upstream integration to stabilise its supply chains and improve its carbon footprint, while enlarging its product range to include both flat and long products. Earlier this week, it announced a £50mn ($66mn) investment to build a new electric arc furnace at its existing plant in Sheffield, in the northeast UK, which will increase the mill's stainless steel products output to over 500,000 t/yr. It is further committed to investment at its Oldbury, UK, tube plant, while also working towards expanding its product range from its Fagersta rolling mill in Sweden. By Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Malawi Kanyika Nb mine development granted extension
Malawi Kanyika Nb mine development granted extension
London, 20 September (Argus) — Australia-based Globe Metals and Mining has been granted an additional year to begin mining at its Kanyika niobium project in central Malawi. The extension to 27 September 2025 was requested because of delays in finalising a mine development agreement with the government. Kanyika, which will be Africa's first niobium mine, will produce niobium and tantalum oxides for export to western markets, Globe said. The mine will be developed in two phases, with phase 1 scheduled for the start of 2026 and phase 2 for third-quarter 2028. The mine is expected to produce around 3,250 t/yr of niobium and 140 t/yr of tantalum over a 25-year lifespan, which could potentially be extended. Niobium is critical to military, aerospace, space and medical industries, and is becoming increasingly important in quantum electronics, in the manufacture of semiconductors and in the electric vehicle sector, Globe said. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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