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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Rains hamper LPG distribution in south Brazil
Rains hamper LPG distribution in south Brazil
Sao Paulo, 8 May (Argus) — Torrential rains that flooded southern Brazil's Rio Grande do Sul state decreased LPG distribution by 7-10pc in the region in the past week, market participants said. Distributor Copa Energia's operations at its Canoas city unit — which is responsible for 30pc of the LPG distributed in the state — are expected to resume in the coming days after being shut last week. The heavy rains since late April — that have left 100 people dead, 128 people missing and almost 164,000 displaced from their homes, according to the state's civil defense — have spurred companies to take measures to maintain gas supply in the region. Some firms have also advanced salary benefits to help workers deal with the crisis. State-controlled Petrobras' 201,000 b/d Alberto Pasqualini (Refap) refinery has cut LPG production, but has not disclosed by how much . The unit also produces diesel, gasoline and fuel oil, among other products. LPG distribution began normalizing earlier this week, after "the feeling of chaos and lack of information" over the weekend had passed, according to an industry executive. Many retailers are now able to retrieve products, but it is still unknown how many routes have been compromised. But LPG stocks have been able to meet demand so far, preventing any shortages. Hydrocarbons regulator ANP's measure to allow collaborative actions among sector companies without the usual bureaucratic procedures to keep the market supplied has had an immediate effect, according to LPG association Sindigas' chief executive Sergio Bandeira de Mello. Distribution has been carried out collaboratively in recent days, despite some retailers' facilities being underwater, vehicles being lost and roads destroyed. But the state will still face months of problems and precariousness, de Mello said. By Betina Moura Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltic April gas consumption rises on year
Baltic April gas consumption rises on year
London, 8 May (Argus) — Gas demand in the three Baltic states and Finland was up by 26pc on the year in April, although there were diverging trends in the different markets. Consumption in Finland, Estonia, Latvia and Lithuania totalled 3.56TWh, up from 2.82TWh a year earlier but down from 4.31TWh in March ( see data and download, graph ). That said, total demand was still well below the 2018-21 average for the month of 5.03TWh. Consumption was up on the year in all three Baltic countries, but Finnish demand edged down. This was the first month in which Finnish demand was lower on the year since April 2023. In contrast, Lithuanian consumption surged by nearly 50pc on the year, and was also higher than in February and March despite the end of the traditional heating season. Gas-fired power generation held broadly stable from a year earlier, totalling 305MW across the four countries compared with 301MW in April last year ( see gas-fired output table ). Output edged down in Estonia and Lithuania and dropped by 25MW in Finland, but this was offset by a 31MW increase on the year in Latvia. But, unlike in March, gas-fired output fell by 246MW, a large contributing factor to the lower gas demand on the month. Many combined heat and power plants will have switched off at around the end of March or mid-April as the traditional heating season came to a close, possibly driving the fall in gas-fired output. But renewables generation was also stronger in April than March, particularly in Finland, where wind output rose to 2.03GW from 1.63GW, while hydro also stepped up. In Lithuania, solar and waste-based production increased on the month. Demand was also stronger despite higher year-on-year minimum temperatures in all four capital cities, which may have curbed most residual heating demand after the end of the traditional heating season, although there was a brief cold snap towards the middle of the month that temporarily drove up demand ( see temperatures table ). With gas-fired power generation only marginally higher than a year earlier, and the warmer weather curbing residential demand, a possible uptick in industrial demand may have driven the aggregate rise in consumption. Average prices on the regional GET Baltic exchange were €33.30/MWh in April, up by 8pc on the month but 30pc lower than a year earlier, the exchange said. Prices increased in around the middle of April "due to the unexpectedly cold weather and the increased demand for gas in the market", but then fell again "as the weather warmed", GET Baltic chief executive Giedre Kurme said. There were a total of 2,400 transactions last month for a combined 642GWh of gas. Volumes sold on the Finnish market accounted for 42pc, the joint Latvian-Estonian market 33pc, and the remaining 25pc was sold in Lithuania. Klaipeda and Balticconnector to change flows The return of the Finnish-Estonian Balticconnector pipeline and the start of maintenance at the Klaipeda LNG terminal in Lithuania will drive changed flow patterns this month. The Balticconector resumed commercial operations on 22 April after being off line since 8 October following a rupture caused by a dragging ship anchor . The reconnection of Finland to its southern neighbours has allowed for strong southward flows since 22 April, at an average of 62 GWh/d on 22 April-7 May. Some of this gas is probably being injected into storage, with the region's only facility at Incukalns switching to net injections on 23 April from net withdrawals of 7 GWh/d earlier in the month. Net injections have since averaged 46 GWh/d on 23 April-6 May, the latest data from EU transparency body GIE show. Stocks at Incukalns ended the withdrawal season on 30 April at 11.29TWh, the highest since at least 2014 and well above the previous high from last year of 9.03TWh. Large volumes of gas that had been stored over the previous summer for export to Finland over the winter were left stranded in Incukalns after the Balticconnector went off line. And the Klaipeda LNG terminal began maintenance on 1 May, which will last until 15 June, as the terminal's Independence floating storage and regasification unit (FSRU) departed for dry-docking in Denmark. As a result, there were net exports from Poland to Lithuania for the first time since early November, at an average of 17 GWh/d on 1-7 May. Some of this gas could have been withdrawn from Ukrainian storage, with flows from Ukraine to Poland averaging 10 GWh/d over the same period. Lithuania's largest supplier Ignitis has said it stored some volumes in Ukraine. And flows at the Kiemenai border point with Latvia have also flipped towards Lithuania, averaging 11 GWh/d on 1-7 May, compared with net flows towards Latvia of 15 GWh/d in April. That said, there were no flows at the point on 6-26 April. By Brendan A'Hearn Finnish, Baltic average gas-fired power generation MW Apr-24 Apr-23 Mar-24 ± Apr 23 ± Mar 24 Estonia 5 6 7 -1 -2 Latvia 49 18 215 31 -166 Lithuania 46 47 52 -1 -6 Finland 205 230 277 -25 -72 Total 305 301 551 4 -246 — Entso-E Daily average minimum temperature in FinBalt capitals °C Apr-24 Apr-23 Mar-24 ± yr/yr ± m/m 2014-23 Apr avg Vilnius 5.22 3.83 0.93 1.39 4.29 2.63 Riga 5.01 4.98 1.93 0.03 3.08 3.65 Tallinn 2.00 1.46 -0.59 0.54 2.59 1.17 Helsinki 0.11 -0.45 -2.55 0.56 2.66 0.12 — Speedwell Finnish and Baltic April consumption by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese ethylene producers unite for decarbonization
Japanese ethylene producers unite for decarbonization
Tokyo, 8 May (Argus) — Japanese petrochemical producers Mitsui Chemicals, Mitsubishi Chemical and Asahi Kasei have agreed to co-operate on decarbonization of their ethylene crackers in west Japan, targeting to decide a pathway within the current April 2024-March 2025 fiscal year. They plan to accelerate carbon neutrality at Mitsubishi Chemical and Asahi Kasei's 496,000 t/yr Mizushima cracker in Okayama prefecture and Mitsui Chemicals' 455,000 t/yr Osaka cracker in Osaka prefecture. The partners aim to introduce biomass feedstocks such as biomass-based naphtha and bioethanol and low-carbon cracking fuels like ammonia, hydrogen and electricity. They said joining forces will enable them to accelerate reducing greenhouse gas emissions, although they have not yet decided any further details. Mitsui Chemicals has experience in using bio-naphtha and recycled pyrolysis oil at its Osaka cracker. Japanese petrochemical producers have increasingly united to achieve decarbonization of their production processes, which account for around 10pc of the Japanese industrial sector's carbon dioxide emissions, according to the trade and industry ministry. Mitsui Chemicals, Sumitomo Chemical and Maruzen Petrochemical agreed to study the feasibility of chemical recycling and using bio-feedstocks at the Keiyo industrial complex in Chiba. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New Zealand’s Genesis Energy to resume coal imports
New Zealand’s Genesis Energy to resume coal imports
Sydney, 8 May (Argus) — New Zealand's upstream firm and utility Genesis Energy plans to resume thermal coal imports later this year to feed its dual gas- and coal-fired Huntly power plant. The resumption was because of lower domestic gas production and rapidly declining coal stockpiles, and will mark the firm's first coal imports since 2022. Coal inventories at the 953MW Huntly plant, — New Zealand's largest power station by capacity and the country's only coal-fired facility — recently slipped below 500,000t, down from 624,000t at the end of March, and will fall below 350,000t by the end of the winter. This will trigger a need to purchase more coal to maintain a target operational stockpile of around 350,000t ahead of winters in 2025 and 2026, the company said on 8 May. Imports are currently the most efficient option for the quantity the company will need, with a delivery time of around three months, chief executive Malcolm Johns said. Genesis typically imports from Indonesia, the company told Argus . Gas production in New Zealand has dropped at a faster rate than expected, with major field production in April down by 33pc on the year, Genesis said. Lower gas availability typically leads to more coal burn, because the Huntly plant runs on gas and coal. This is in addition to an extended period of low hydropower inflows in recent months, which required higher thermal generation to ensure supply security. A prolonged outage at Huntly's unit 5 gas turbine between June 2023 and January 2024 also led to an even greater need for coal-fired generation, Genesis said. Biomass transition The company — which is 51pc owned by the state — is the second-largest power retailer in New Zealand, behind domestic utility Mercury, according to data from the Electricity Authority. It has a NZ$1.1bn ($659mn) programme for renewable power generation and grid-scale battery storage , which includes a potential replacement of coal with biomass at Huntly. But the transition to biomass "will take some years," Johns said. Genesis has successfully completed a biomass burn trial at Huntly last year and has collaboration agreements with potential New Zealand pellet suppliers, but there is currently no local source for the type of pellets needed for the plant. Genesis is hoping to move to formal agreements "as soon as counterparties are able". The company will not consider importing pellets, it told Argus . "We will only use biomass if we can secure a local New Zealand supply chain that is sustainable and cost-effective," it said. Domestic gas production New Zealand's three-party coalition government said separately on 8 May that the "material decline" in local gas production threatens energy security, blaming the previous Labour party-led government for "policy decisions which have disincentivised investment in gas production." The decisions — which were part of the former government's pledge to achieve a carbon-neutral economy by 2050 — led to a reduction in exploration for new gas resources since 2021, while suppressed maintenance drilling reduced production from existing gas fields, according to a joint release from energy minister Simeon Brown and resources minister Shane Jones. "Due to this significant reduction in gas production, the government has also been advised that some large gas consumers are expressing concern about their ability to secure gas contracts," the government said. Major industrial users such as Canada-based methanol producer Methanex have been forced to reduce production as a result, it noted. "We are working with the sector to increase production, and I will be introducing changes to the Crown Minerals Act to parliament this year that will revitalise the sector and increase production," Jones added. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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