WTI falls by 6pc as investors flee to cash
WTI crude futures slumped by as much as 6pc in early trading today as investors worldwide take shelter in safe haven US dollar on heightened fears of recession.
November Nymex WTI shed $4.97/bl to trade at $78.52/bl by mid-morning as part of a broad selloff in markets including commodities, equities, and foreign currencies.
The light sweet crude benchmark at Cushing, Oklahoma, has not settled below the $80/bl mark since 10 January.
The US DXY dollar index, which tracks the dollars versus a basket of trading partner currencies, was at its highest in more than 20 years, as investors seek the relative safety of the dollar amid the global jitters. That is making dollar-denominated commodities such as oil pricier for holders of foreign currency.
The British pound fell to its lowest against the dollar since 1985 while the Japanese yen and the Chinese yuan have also weakened sharply.
The global selloff includes major stock exchanges with US Dow Jones Industrial and the German DAX both down at lows not seen in almost two years and the UK's FTS-100 down by more than 2pc today. The S&P 500 is down by about 1.75pc and the energy and commodities-heavy Toronto Stock Exchange is down by more than 2.5pc.
Base metal prices on the London Metal Exchange (LME) also fell heavily.
The jitters have intensified after a slew of central banks, led by the US Federal Reserve, this week hiked interest rates and warned that inflation was likely to remain stubbornly high. Many, like the Fed, lowered their growth outlooks. The Fed expects the US economy to grow just 0.2pc in the fourth quarter from a year earlier, down from a forecast of 1.7pc in June. Fed board members and bank presidents see unemployment reaching 4.4pc in a year, from 3.7pc in August.
The Fed on Wednesday raised its target rate by 75 basis points, its third consecutive increase of that magnitude in four months, warning it would do what it takes, including risking higher unemployment and a recession, to bring down inflation.
The gloomy macroeconomic outlooks have overshadowed the prospect of further escalation of the war in Ukraine, which upset global crude flows and has contributed to rising prices this year.
President Vladimir Putin this week announced a partial mobilization and issued a barely-veiled threat to use nuclear weapons. This prompted US President Joe Biden to call on the UN to hold Putin accountable for war crimes.
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China's Hunan Yuneng to build Spain battery LFP plant
China's Hunan Yuneng to build Spain battery LFP plant
Beijing, 24 April (Argus) — Chinese battery cathode producers have continued to expand investment in the overseas market, with the country's largest lithium iron phosphate (LFP) producer Hunan Yuneng planning to build a plant in Spain. Yuneng plans to invest 982mn yuan ($135.5mn) to build a 50,000 t/yr LFP production plant in Spain's Extremadura region. The firm aims to complete the site construction in 15 months after obtaining approval from the authorities. It will establish a subsidiary Yuneng International (Spain) New Energy Battery Material to develop this project. It did not disclose more details such as the launch dates. "This project is to strengthen the company's position in the global market and meet demand from overseas consumers, on the back of growing demand for LFP cathodes in the overseas market driven by the development of new energy vehicles outside China, especially in Europe," Yuneng said. Yuneng produced 504,400t of LFP cathodes in 2023, up by 50pc from a year earlier, with sales also rising by 56pc to 506,800t over the same period. It has achieved a nameplate capacity of 700,000 t/yr for LFP as of the end of 2023. It is also expanding capacity for another emerging battery cathode material, lithium manganese iron phosphate, which has higher energy density and allows for a longer driving range in electric vehicles (EVs), better performance in winter temperatures, and has lower manufacturing costs compared with LFP. Overseas expansions A growing number of Chinese battery cathode firms have accelerated their investment in overseas production projects, such as in France, Morocco and South Korea , to diversify resource origins and meet market entry conditions to the US required by the Inflation Reduction Act, and to cope with restrictions on key battery materials in the EU's Critical Raw Materials Act. Argus forecasts total demand for EV battery cathode material will reach 7.7mn t by 2034, from only 1mn t in 2022, with LFP expected to continue to take up the bigger share compared with ternary battery cathodes. Argus -assessed costs for cathode active material LFP were $13.95/kwh on 23 April, up from $12.31/kwh at the start of this year. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vancouver Aframax rates at 6-month lows ahead of TMX
Vancouver Aframax rates at 6-month lows ahead of TMX
Houston, 23 April (Argus) — An oversupply of Aframax-size crude tankers on the west coast of the Americas in anticipation of the Trans Mountain Expansion (TMX) pressured Vancouver-loading rates to six-month lows on 19 April. With the 590,000 b/d TMX project expected to commence commercial service on 1 May, shipowners have positioned more vessels to be on the west coast to satisfy anticipated demand in Vancouver, but that demand has yet to materialize, leaving the Aframax market oversupplied for now, market participants said. Aframax rates from Vancouver to the US west coast began falling in mid-to-late March as an increase of ballasters added to tonnage in the region, helping drop the rate to ship 80,000t of Cold Lake on that route to $1.50/bl on 19 April from $2.55/bl on 21 March, according to Argus data. The rate held at $1.50/bl on 22 April, the lowest since 2 October and just 3¢/bl higher than the lowest rate since Argus began assessing the route on 21 April 2023. Similarly, the Vancouver-China Aframax rate also fell to a six-month low of $6.59/bl for Cold Lake on 19 April, down from $7.78/bl on 2 April, according to Argus data. In addition to the ballasters, two Aframaxes — the Jag Lokesh and the New Activity — are hauling Argentinian crude to the US west coast and are expected to begin discharging on 3 and 6 May, respectively, according to Vortexa. The Argentinian port of Puerto Rosales is mostly restricted to Panamaxes but can accommodate smaller Aframaxes. Downward pressure from across canal A recent slump in the Gulf of Mexico and Caribbean Aframax market, due in part to falling Mexican crude exports to the US Gulf coast , has exerted additional downward pressure, a shipowner said. "Though markets at each side of the (Panama) Canal are different, softer sentiment looms in the region," the shipowner said. Last week, a charterer hired two Aframaxes for west coast Panama-US west coast voyages, the first at WS102.5 and the second at WS95, equivalent to $12.71/t and $11.78/t, respectively, as multiple shipowners competed for the cargoes. The Vancouver Aframax market typically draws from the same pool of vessels as the west coast Panama market. For example, the Yokosuka Spirit , one of the Aframaxes hired to load in west coast Panama, discharged a Cold Lake cargo in Los Angeles on 21-22 April after loading in Vancouver in mid-March, according to Vortexa and market participants. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US oil and gas deals slowing after record 1Q: Enverus
US oil and gas deals slowing after record 1Q: Enverus
New York, 23 April (Argus) — US oil and gas sector mergers will likely slow for the rest of the year following a record $51bn in deal in the first quarter, according to consultancy Enverus. Transactions slowed in March and the second quarter appears to have already lost momentum, according to Enverus, following the year-end 2023 surge in consolidation that spurred an unprecedented $192bn of upstream deals last year. The Permian shale basin of west Texas and southeastern New Mexico continued to dominate mergers and acquisitions, as companies competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of closely-held Endeavor Energy Resources . Others include APA buying Callon Petroleum for $4.5bn in stock and Chesapeake Energy's $7.4bn takeover of Southwestern Energy . The deal cast a spotlight on the remaining private family-owned operators, such as Mewbourne Oil and Fasken Oil & Ranch, which would be highly sought after if they decided to put themselves up for sale. "However, there are no indications these closely held companies are looking to exit any time soon," said Andrew Dittmar, principal analyst at Enverus. "That leaves public explorers and producers (E&P) looking to scoop up the increasingly thin list of private E&Ps backed by institutional capital and built with a sale in mind — or figuring out ways to merge with each other." Deals including ExxonMobil's $59.5bn takeover of Pioneer Natural Resources, as well as Chevron's $53bn deal for Hess, have attracted the attention of anti-trust regulators. The Federal Trade Commission has also sought more information on the Chesapeake/Southwestern deal. "The most likely outcome is all these deals get approved but federal regulatory oversight may pose a headwind to additional consolidation within a single play," said Dittmar. "That may force buyers to broaden their focus by acquiring assets in multiple plays." By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Inversión en autos eléctricos en México crecerá
Inversión en autos eléctricos en México crecerá
Mexico City, 23 April (Argus) — Las inversiones en México en ensamblaje de vehículos eléctricos (EV) y cadenas de suministro alcanzaron un máximo histórico en 2023 y se espera que crezcan en 2024, a pesar de una reciente desaceleración de la demanda global de EV y las próximas elecciones presidenciales. Se realizaron 96 inversiones en México durante 2023 en vehículos eléctricos y gastos relacionados con la electromovilidad, que alcanzaron los $5,600 millones, según el último informe de electromovilidad de la empresa mexicana de investigación Directorio Automotriz (DA). La empresa espera que esto se expanda en 11pc a $6,200 millones en 2024. Las expectativas de crecimiento global se han moderado para los vehículos eléctricos, pero DA señaló que la trayectoria sigue siendo positiva con proyecciones para las ventas globales de EV en 13.3 millones de unidades vendidas este año frente a los 9.6 millones vendidos en 2023. El año comenzó con varios anuncios de inversión. En febrero, Volkswagen dijo que invertirá $942 millones en su centro de electromovilidad de Puebla para agregar producción de EV. Magna, una empresa de piezas estructurales de EV, invertirá $166 millones para suministrar el complejo de General Motors en Ramos Arizpe, Coahuila. Seojin Mobility de Corea planea una inversión de hasta $260 millones para una planta de montaje de motores eléctricos en Escobedo, cerca de Monterrey, Nuevo León, con planes de completarla en febrero de 2025. Hay más anuncios de inversiones relacionadas con los vehículos eléctricos en el horizonte a finales de este año para empresas chinas como BYD, el principal competidor global de Tesla, así como Chirey Motors y SAIC, afirmó DA. El factor político El momento político en el país es importante, con elecciones presidenciales el 2 de junio y leyes electorales que limitan la participación de funcionarios gubernamentales en cualquier anuncio de inversión importante o evento relacionado desde el 1 de marzo. La perspectiva de la fabricación de automóviles chinos en suelo mexicano también está provocando nerviosismo entre los grupos comerciales estadounidenses que afirman que las empresas chinas están utilizando México como centro de representación para evitar aranceles. Aunque EE. UU. tiene un arancel de 27.5pc sobre los vehículos eléctricos chinos, incluso si se fabrican en suelo mexicano, las importaciones desde México de EV construidos con piezas chinas solo pagan un arancel de 2.5pc. "Pekín ya está utilizando a México como puerta trasera para eludir los aranceles de las importaciones a EE. UU. y está siguiendo el mismo plan de juego que casi destruyó las industrias del acero y solar de EE. UU.", dijo la Alianza para la Fabricación Estadounidense (AAM, por sus siglas en ingles) en un informe a finales de febrero. La presión sobre el gobierno de EE. UU. para tomar medidas está aumentando, con la presidencia y muchos asientos del congreso en juego en las elecciones de noviembre. A finales de 2023, en México había 262 empresas registradas relacionadas con el ensamblaje, la producción y la venta de vehículos eléctricos, según DA. Esta cifra se expandió en 19.6pc solo en los últimos cuatro meses, de acuerdo con la misma información. México podría producir 214,040 vehículos eléctricos en 2024, un aumento de 96pc comparado con 2023, luego de un crecimiento de 38pc el año pasado en 2022, estima DA. El principal anuncio hasta la fecha relacionado con los vehículos eléctricos en México sigue siendo el que hizo Tesla el 1 de marzo. La Gigafactoría México podría atraer hasta $15 mil millones, incluyendo inversiones adicionales. Pero el progreso en la Gigafactoría ha sido lento, luego de que Tesla no participó en una ceremonia en febrero, organizada por el gobernador del estado. Grupos ecologistas también se han quejado de su posible impacto en el suministro de agua en la región propensa a la sequía. Aunque la inversión en vehículos eléctricos está ganando terreno debido a factores como el nearshoring (relocalización de las cadenas de suministro más cerca de los mercados finales), no se garantiza un crecimiento continuo. La agencia de calificación Moody's ha mencionado recientemente una desaceleración global en inversiones como en las calificaciones de Nemak de México, líder en la fabricación de carcasas y soportes de aluminio para baterías de litio utilizadas en vehículos eléctricos. Mientras tanto, las ventas nacionales de vehículos eléctricos e híbridos en México continúan expandiéndose, subiendo en 75pc año tras año hasta 7,442 en enero, representando 6.6pc de todas las ventas nacionales de automóviles en el mes, según los datos de la agencia de estadísticas Inegi. Por James Young Planes recientes de inversión en EV y electromovilidad en México Anunciado Compañía Proyecto Inversión Ubicación Feb 23 Stellantis Producción de la van de carga EV RAM ProMaster 200 Saltillo, Coahuila Marzo 23 Tesla and OEM suppliers Tesla Gigafactoría e inversiones asociadas 15,000 Santa Catarina, Nuevo Leon Marzo 23 Jetour Planta de ensamblaje de vehículos híbridos y de combustión interna 3,000 Ramos Arizpe, Coahuila Feb 24 Volkswagen Centro estratégico para EV 942 Puebla Marzo 24 Magna Agregar dos divisiones para partes de EV 166 El bajío Marzo 24 BMW Construir planta de ensamblaje de baterías para EV 849 San Luis Potosí Marzo 24 Seojin Mobility Construir planta de motores para EV 260 Sonora Abril 24* ZF Group Centro de I+D en electromovilidad 200 Monterrey, Nuevo León — Anuncios de la compañías *Abierto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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