US June inflation slows to 1-year low of 3pc

Spanish Market: Metals, Natural gas, Oil products
11/07/24

US inflation slowed in June to the lowest in a year while core inflation hit a more than three-year low, signs of easing price pressures that may prompt Federal Reserve policymakers to begin cutting borrowing costs in the fall.

The consumer price index (CPI) slowed to an annual 3pc in June, lower than economists' estimates for a 3.1pc reading, from 3.3pc in May and 3.4pc in April, the Bureau of Labor Statistics reported today. So-called core inflation, which strips out volatile food and energy prices, rose by 3.3pc in June, the lowest since April 2021, and slowing from 3.4pc in May.

The energy index rose by an annual 1pc in June, down from 3.7pc in May, while the gasoline index contracted by 2.5pc in June compared with a 2.2pc gain in May. Energy services rose by an annual 4.3pc, slowing from 4.7pc the prior month.

After the report, the CME's FedWatch tool signaled an 81pc probability that the Fed will cut its target rate by a quarter point in September from near 70pc odds Wednesday. Probabilities of three quarter point cuts by December rose to 38pc today from 26pc the prior day.

Food costs rose by 2.2pc in June from 2.1pc the prior month. Shelter rose by 5.2pc from 5.4pc the prior month. Transportation services rose by 9.4pc in June following a 10.5pc gain the prior month. Airline fares fell by 5.1pc in June after a 5.9pc decline.

Headline inflation had risen from 3.1pc in January to as high as 3.5pc in March as economic data, especially job gains, had come in stronger than expected. That had prompted the Federal Reserve to delay widely expected rate cuts as it said it needed "greater confidence" that inflation was on a "sustained" path towards its 2pc target.

The Fed hiked its target rate to a 23-year high of 5.25-5.5pc in July 2023 and has kept it there since to rein in inflation that hit a high of 9.1pc in June 2022. The Fed, in its latest policy meeting last month, penciled in one likely quarter point cut this year, down from three penciled in last March.

CPI contracted by a seasonally adjusted 0.1pc in June from the prior month, after a flat reading in May, a 0.3pc monthly gain in April and 0.4pc gains in February and Marhc. Core CPI was up by 0.1pc for the month after a monthly gain of 0.2pc in May.

By Bob Willis

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19/06/25

SEE gas operators propose changes to Route 1 product

London, 19 June (Argus) — Gas transmission system operators (TSOs) in southeast Europe have proposed several changes to the "Route 1" integrated capacity product from Greece to Ukraine, including allowing nominations from the Greek virtual trading point (VTP) to count toward exports, subject to approval by the regulator. Route 1, a product offered only between June and October in order to help Ukraine reach its goal of importing roughly 5bn m³ of gas in preparation for the next heating season, bundles together capacity at the Kulata/Sidirokastro, Negru Voda/Kardam, Isaccea/Orlovka, Kaushany and Grebenyky interconnection points. The first monthly auction for Route 1 was held on 29 May , but no capacity sold at the auction as traders pointed toward serious questions over the product's compliance with EU law, a restrictive rule set and insufficient economic incentive to book. During a meeting with regional shippers today, the route's TSOs proposed several changes to the product. The most prominent change would allow nominations from the Greek VTP to count towards exports under the Route 1 product, which would increase the pool of eligible users if approved by the Greek regulatory authority. Under previous rules, Route 1 users would have had to cumulatively nominate at the Greek entry points of Agia Triada, Nea Mesimvria, Amfitriti and Kipi at least as much as they notify Greek TSO Desfa they intend to deliver to Ukraine, but this list explicitly did not include the Greek VTP or Kulata/Sidirokastro. These rules effectively heavily favoured users with LNG capacity at Revithoussa. The operators also clarified that Route 1 users will not be required to obtain a licence from Moldovan regulator Anre and conclude a balancing contract, as the gas will only be transmitted from one Moldovan interconnection to another. It is also not required to sign a balancing contract with Romanian TSO Transgaz, although it is necessary with Bulgartransgaz. The operators also clarified that interested parties do not need to have licences to trade in all five countries along the route, simply to be registered system users with access to transmission services for each of the TSOs. Although several market participants told Argus that even this process can take a month or longer. Other details of the product, such as the 25pc discount at all points except Isaccea entry, Kaushany exit and Grebenyky entry, where a 46pc discount is already applied by the Ukrainian TSO, remain in place. The operators do not appear to have addressed concerns raised by Energy Traders Europe that the offering of discounts on point-to-point capacity on a monthly basis is not in line with the EU's network code on capacity allocation (NC CAM). Traders today still expressed reservations about booking the Route 1 product, noting that the Greek discount to other competing routes into Ukraine is probably not large enough to justify booking given the cost of the tariffs. Argus assessed the Greek day-ahead price at a €6.70/MWh discount to the Slovak day-ahead market, the other most prominent underutilised route to Ukraine, at the most recent close. But at a cost of around €7/MWh for the Route 1 tariffs and volume fees, compared with a monthly Slovak exit tariff of €1.47/MWh and a volume fee of around €0.35/MWh, Route 1 would only marginally be in the money. Further, the 131 GWh/d booking from the Czech Republic to Slovakia for July , as well as a nearly correspondingly-large Ukrainian entry booking from Slovakia , suggests that traders intend to supply a large volume of gas to Ukraine along the main route competing with Route 1. Additionally, worries about the potential regulatory problems associated with Route 1 have not been addressed, leaving some firms uneasy, although all agreed that the potential inclusion of Greek VTP nominations would have a positive effect on potential interest. The next Route 1 auction will be held on the Regional Booking Platform (RBP) on Monday, with around 30 GWh/d on offer. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

BMWE legt RED III Entwurf vor

19/06/25

BMWE legt RED III Entwurf vor

Hamburg, 19 June (Argus) — Das BMWE hat Verbänden am 19. Juni einen ersten Referentenentwurf zur Umsetzung der RED III vorgelegt. Diese sieht grundlegende Veränderungen zur Erfüllung der THG-Quote vor. Erste Preisindikationen steigen schlagartig. Um die auf EU-Ebene gültige dritte Fassung der Erneuerbare-Energien-Direktive (RED III) in deutsches Recht umzusetzen, hat das Bundesministerium für Wirtschaft und Energie (BMWE) einen Entwurf zur Anpassung des Bundes-Immissionsschutzgesetzes (BImSchG) vorgelegt. Unter anderem sieht der Entwurf vor, die Treibhausgasminderungsquote (THG-Quote) bis 2040 schrittweise auf 53 % zu erhöhen (siehe Grafik). Das bisherige Ziel war eine Quotenhöhe von 25,1 % im Jahr 2030. Auch der Pfad bis 2030 wurde leicht angepasst. Damit käme das Gesetz, wenn es in dieser Form umgesetzt wird, einer vielgeäußerten Forderung der Biokraftstoffindustrie nach, die sich für eine stärkere Quotenerhöhung eingesetzt hat. Infolgedessen melden erste Marktteilnehmer Angebote für Andere Zertifikate für das Verpflichtungsjahr 2026 in Höhe von 175 €/tCO2e. Für dieselben Zertifikate für 2025 werden 125 €/tCO2e geboten. Zusätzlich enthält der Entwurf einen Mechanismus, der im Falle einer Übererfüllung die Höhe der Quote im übernächsten Jahr erhöht. Ausschlaggebend ist dafür, ob die gesamte Quotenerfüllung in einem Jahr bereits ausreichen würde, um die Quotenhöhe des Übernächsten Jahres zu erfüllen. Darüber hinaus sieht der Entwurf vor, die Option zur zweifachen Anrechnung von als fortschrittlich geltenden Biokraftstoffen abzuschaffen und die Mindestquote zu erhöhen. Diese steigt dann bis 2030 auf 3 %. Zuvor lag das Ziel bei 2,6 %. Viele Marktteilnehmer haben gemutmaßt, dass die Doppelanrechnungsoption entfallen würde, um die benötigte Menge an Erfüllungsoptionen zu erhöhen. Auch welche Kraftstoffe zur Erfüllung der Quote genutzt werden können wird angepasst: So können keine Kraftstoffe auf Soja- oder Palmölbasis zur Erfüllung genutzt werden. Letzteres schließt auch Kraftstoffe aus Nebenprodukten der Palmölproduktion, allen voran Palmölmühlenabwasser (POME) ein. Dieses wurde in der Vergangenheit insbesondere genutzt, um die fortschrittliche Unterquote zu erfüllen, da es dank einer Sonderklausel trotz seiner Einstufung als fortschrittlich nur einfach zur Erfüllung der THG-Quote angerechnet werden konnte. Diese Regelung würde direkt ab Inkrafttreten der Gesetzesänderung wirksam werden. Die Anrechnungsgrenzen für futtermittel- und abfallbasierte Kraftstoffe werden ebenfalls angepasst: Während das Limit für futtermittelbasierte Produkte bis 2030 von 4,4 % der in Verkehr gebrachten Energiemenge auf 3 % reduziert wird, steigt das Limit für abfallbasierte Produkte wie Altspeiseöl (UCO) bis 2039 von 1,9 % auf 2,8 %. Zusätzlich wird eine Mindestquote für erneuerbare Kraftstoffe nicht-biogenen Urpsrungs (RFNBO) eingeführt. 2026 beträgt der energetische Mindestanteil 0,1 % und soll bis 2040 auf 12 % steigen. Zu den RFNBOs gehören unter anderem synthetische Kraftstoffe wie eFuels (PtL, Power-to-Liquid) und Grüner Wasserstoff. Der Entwurf erweitert den Geltungsbereich der THG-Quote außerdem auf den Luftverkehr. Bisher galt hier eine gesonderte Quote für erneuerbare Kraftstoffe. Darüber hinaus unterliegt nun auch der Seeverkehr der THG-Quote. In der Seefahrt genutzte Kraftstoffe, die im Straßenverkehr anrechenbar wären, können hierbei jedoch nicht für die Erfüllung genutzt werden. Damit soll vermieden werden, dass Unternehmen die Erfüllung ihrer Verpflichtung komplett vom Straßenverkehr auf die Seefahrt umwälzen. Der Entwurf sieht außerdem vor, dass erneuerbare Kraftstoffe nur noch angerechnet werden können, wenn Vor-Ort-Kontrollen der Produktionsstätten durch staatliche Kontrolleure ermöglicht werden. Dies soll das Betrugspotenzial bei der Anrechnung von Biokraftstoffen mindern. Der Entwurf liegt nun den Branchenverbänden vor. Ein Mitglied des Umweltausschusses erklärte am 4. Juni im Rahmen einer Podiumsdiskussion, dass der Entwurf nach Anpassung an eventuelle Verbandsvorschläge im Oktober dem Parlament zur Debatte vorgelegt werden soll und idealerweise zum 1. Januar 2026 in Kraft treten soll. Der Referentenentwurf sieht vor, dass die Änderungen an der THG-Quote mit Beginn des neuen Verpflichtungsjahres in Kraft treten. Dies soll Marktverwerfungen verhindern, für den Fall, dass die Gesetzesänderung innerhalb eines Verpflichtungsjahres in Kraft treten sollte. Von Svea Winter & Max Steinhau Entwicklung der THG-Quote bis 2040 Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2025. Argus Media group . Alle Rechte vorbehalten.

ArcelorMittal halts DRI-EAF projects in the EU

19/06/25

ArcelorMittal halts DRI-EAF projects in the EU

London, 19 June (Argus) — Luxembourg-based steelmaker ArcelorMittal said it will not proceed with previously announced direct-reduced iron (DRI) and electric arc furnace (EAF) decarbonisation projects at Bremen and Eisenhuttenstadt in Germany, citing the unfavourable policy and market environment. The company initially planned to supply DRI from Bremen to the EAF in Eisenhuttenstadt after their construction. But in November last year, the company said it was unable to take final investment decisions on building the DRI-EAF assets in the EU because of challenging energy, policy and market environments that were not moving in a favourable direction. ArcelorMittal this week announced that it will carry out repair works on blast furnace 5A at its Eisenhuttenstadt site next week until 28 June, similar to the repairs last year. The blast furnace has capacity of 2.5mn t/yr. The company has urged the EU to accelerate enforcement of the carbon border adjustment mechanism (CBAM), strengthen trade protections and implement the EU Metals Action Plan to restore the competitiveness of low-emissions steel. In May, ArcelorMittal confirmed its intention to invest €1.2bn in a new EAF at its Dunkirk site in France. Market participants suggest the company was delaying its DRI investments in Ghent, Belgium, and Dunkirk, but the steelmaker has yet to comment. The French government in 2023 approved an €850mn grant to ArcelorMittal to decarbonise its Dunkirk asset. By Elif Eyuboglu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Nationalisation may prop up surplus steel: Worldsteel

19/06/25

Nationalisation may prop up surplus steel: Worldsteel

New York, 19 June (Argus) — Redundant steelmaking capacity is unlikely to be reduced by decarbonisation and market forces, given global fragmentation and the focus on resilient supply chains, Edwin Basson, director general of international industry organisation Worldsteel, told Argus this week. "If you asked me five years ago, I would have said I suspect decarbonisation and market forces would have led to reductions in redundant capacities, but the few recent examples we've seen of nationalisation or re-nationalisation, quasi-nationalisation, will most likely see countries try to retain steelmaking capacity," Basson said on the sidelines of the Global Steel Dynamics Forum in New York. There are several instances of governments becoming involved in the operation of troubled mills in Europe and the UK. Basson said the industry's future direction depends on three main forces — environmental, employment and economic efficiency. In previous decades, economic efficiency was the main driver, allowing inefficient capacity to close or be modified. But the zeitgeist of reshoring, re-regionalisation and focus on employment has challenged this force, also contributing to the continued operation of surplus capacity that is not necessarily required by the market. "The strength of this efficiency force has reduced the labour and the environmental force is receiving more prominence at the moment. The moment you put a national interest filter on top of all of this, then the efficiency force becomes of minimal importance," he said. And there is limited room to consolidate producers in developed markets, such as the US and EU, given competition concerns, which also dampens cross-border consolidation to some extent. There is scope for consolidation in China, which is still behind the targets set by the government in the previous five-year plan — of 60pc of capacity being consolidated — and in smaller developing economies, shrinking the long tail of smaller producers. Worldsteel forecasts that half of all steel will still be made in blast furnaces in about 20 years from now, despite the current focus on decarbonisation. There is insufficient scrap in the world for the whole industry to move away from blast furnaces and insufficient high-quality direct-reduced iron feed, Basson said. In the EU, where decarbonisation is perhaps the most pressing issue as mills face mounting carbon taxes, the energy challenge is of particular significance. "There is a reason that Scandinavia is, at least in the EU, the home of very progressive decarbonisation producers," he said. "They have access to high-quality materials, direct-reduced iron and so forth, and access to high-quality sustainable energy that is not carbon-based. It's a very different story in other parts of northern Europe, where energy is a key question, and a different question again in the south, where it's energy and access to raw materials." "There will be multiple pathways to decarbonise, depending on location, and Europe may soften its policies to enable existing production routes to remain a force for a number of years longer," he said. Exponential breakthrough technologies related to the blast furnace could see emissions fall to a similar level as the gas-fed direct-reduced iron/electric arc furnace of 1.3-1.4t of carbon per tonne of steel. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India's new steel input quality rule to curb imports

19/06/25

India's new steel input quality rule to curb imports

Mumbai, 19 June (Argus) — India's ministry of steel has issued an order stating raw materials used in imported finished steel products should meet Indian quality standards. This is likely to restrict imports, resulting in shortages of specialty steel products used by the automotive industry and other consumers, industry participants said. The order, issued on 13 June, will now require semi-finished products such as slab, billets and ingots to comply with Indian standards, even if the finished steel product already has a Bureau of Indian Standard (BIS) certification. If an overseas supplier has a BIS permit for IS 2062 grade hot-rolled coil, it will also need a similar certification for IS 14650-grade slab. For downstream products such as hot-dip galvanised steel, the input materials would constitute hot-rolled and cold-rolled sheets and strips, which would also need BIS certification, along with semi-finished products. Earlier exporters only needed BIS compliance for the final steel product and not the input material. The original quality control order covered 151 steel products. Steel consumers concerned A provisional 12pc safeguard duty implemented from 21 April has slowed imports of certain flat steel products. The new quality control rule, referred to by some industry participants as an additional "barrier" for imports, is applicable to imports with a bill of lading on or after 16 June. It has stoked concerns among micro, small and medium enterprises (MSMEs) that consume overseas steel not made in India, market participants said. The order "has triggered fears of massive losses and plant closures among MSMEs that rely on imported semi-finished steel," according to a report by think-tank the Global Trade Research Initiative (GTRI). "Many have already paid for shipments now deemed non-compliant," the report said. The automotive industry is likely to face production hurdles. Japan has been supplying a lot of specialty steel, which is not manufactured in India, to the Indian automotive industry, sources said. An automotive end-user said they were in talks with the government and declined to comment on the new order. "Steel users across India are shocked," an international steel trader said. In certain cases such as cold-rolled non-oriented steel, a type of electrical steel used in motors, the raw materials such as cold-rolled full hard steel (CRFH) or hot-rolled coil (HRC) may have BIS licence but inputs used to make CRFH or HRC may not meet Indian standards, the trader added. There is already a shortfall of certain speciality steel grades in India. Only about 12pc of the required 400,000t of cold-rolled grain-oriented steel (CRGO) was produced domestically in April 2023-March 2024, according to GTRI. The remaining volumes were imported from overseas suppliers such as China, Japan, Russia, and South Korea. India launched a new production-linked incentive scheme for speciality steel products this year, with less criteria for investment than the previous version. The new steel input quality rule is clearly in line with the government's "Make in India" initiative, a Mumbai-based trader said. It will now be difficult to get imports purchased in recent weeks by steel consumers, another Mumbai-based trading company said, adding that market conditions are tilting in favor of domestic producers. The new order is also expected to weigh on imports of plate from South Korean producers which do not have a BIS for certain input materials, the trader said. By Amruta Khandekar Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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