Mexican ag, LPG prices drive July inflation

Spanish Market: Metals, Natural gas
08/08/24

Gains in agriculture and LPG gas price helped drive Mexico's headline inflation in July to its highest level since May 2023, although core price gains continued to ease.

The consumer price index (CPI) rose to an annual 5.57pc in July, up from 4.98pc in June and increasing for a fifth consecutive month, Mexico's statistics agency Inegi said today.

A big driver behind the July reading are fruit and vegetable prices, which climbed by 24pc in July, compared with 18pc in June.

Farm goods, and tomatoes in particular, have been hit by a double dip of bad weather with two months of extreme drought before flooding rains began to hit in late June at an active start to this year's hurricane season.

Also hitting the consumer price index (CPI), energy inflation reached 9.2pc in July from the same month in 2023. The group was led by higher LPG prices, up 26pc over last year. Low-octane gasoline prices were next highest, up 6.9pc. Electricity prices followed, rising 5.35pc on an annual basis. Domestic natural gas was the only energy item to decline, dropping 3.4pc in July.

Banorte, however, stressed that core inflation – which excludes volatile food and energy – did ease again in July, slowing to 4.05pc for the month from 4.13pc in June, marking 18 consecutive months of easing.

In a note, Banorte said energy prices stand to benefit from base calendar effects in the coming months.

Mexican bank Citibanamex noted the lower core as well in a note, adding how the recent rains are beginning to reach the most drought stricken areas, and this should help begin to contain non-core prices. "We expect annual headline inflation to resume a gradual downward trend starting in August, and we maintain our estimates for the end of 2024 at 4.4pc for headline inflation and 4.1pc for core inflation," the bank said.

The CPI increased by 1.05pc in June from the prior month, when it posted a 0.38pc monthly gain, said Inegi.

The central bank's monetary policy committee today lowered its reference interest rate to 10.75pc from 11pc, its first reduction since March.

The central bank cited the continued drop in core prices, adding the inflationary environment might allow for further rate adjustments, considering "global shocks will continue fading and the effects of weakness in economic activity."

By James Young

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20/06/25

Cop 28 outcome must be implemented in full: Cop 30 head

London, 20 June (Argus) — The incoming UN Cop 30 summit president Andre Correa do Lago has set out his objectives for the conference in November, placing as a key priority the Cop 28 outcome of trebling renewables capacity and transitioning away from fossil fuels. Correa do Lago today said his plan is to drive "collective action" to tackle climate change, placing a strong emphasis on the global stocktake, the first of which was concluded at Cop 28 in 2023 . That outcome saw almost 200 countries commit to "transition away" from fossil fuels, as well as treble renewables capacity by 2030. The global stocktake, a five-yearly process, sets out progress made towards Paris climate agreement goals. Today's "Action Agenda must drive momentum towards the full implementation of the GST [global stocktake]", Correa do Lago said. The incoming Cop president is focusing on implementing agreements made at previous Cops, and ensuring that countries and all other stakeholders — such as sub-nationals and the private sector — work together to put the decisions into action. Correa do Lago's letter today repeated language from the Cop 28 outcome, and noted his other main themes for Cop 30, which will take place in Belem, in Brazil's Para state, on 10-21 November. As well as shifting energy, industry and transport from fossil fuel-powered to lower- or zero-carbon alternatives, he listed forests, oceans and biodiversity and agriculture and food as key topics. Further topics involved building resilience for cities, infrastructure and water and human and social development. A final priority was enablers and accelerators across the board, including for finance and technology. Correa do Lago said in May that Cop 30 should be a "pivot point" to action on climate change, and "a new era of putting into practice" what has been agreed at previous Cop summits. He has noted a difficult geopolitical situation , which could make talks more challenging. Brazil's Cop 30 presidency is also focused on climate finance at UN climate talks, currently underway in Bonn, Germany. These 'halfway point' discussions serve to cover substantial technical groundwork ahead of political talks at Cop summits each November. Brazil yesterday at Bonn presented a draft of a roadmap to scale up climate finance — from all sources — to $1.3 trillion/year by 2035. The roadmap will not be officially negotiated, although it was a key outcome from Cop 29 in 2024 and is likely to be finalised just ahead of Cop 30 this year. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Eur Cu scrap prices rise on cathode supply squeeze

20/06/25

Eur Cu scrap prices rise on cathode supply squeeze

London, 20 June (Argus) — Millberry copper scrap is trading at the same level in Europe as the London Metal Exchange (LME) copper cash price, as buyers turn to high-grade scrap to replace the limited availability of cathodes that were pre-emptively shipped to the US to avoid potential tariffs under US president Donald Trump. The Argus weekly assessment for Millberry (bare bright) rose to 99.5-100pc of the LME cash price on 17 June, from 98-99.5pc on 9 June. Europe #1 (Berry/Candy) was last assessed at 97.75-98.75pc of the LME cash price and Europe #2 (Birch/Cliff) was at 91-93pc. Millberry is a suitable substitute for copper cathode owing to its high copper content of around 99.95pc, while even Berry/Candy with slightly lower copper content, is also a viable alternative. Birch/Cliff scrap, a more mixed grade, requires more processing and yields lower copper output, but is still being evaluated by some buyers because of limited cathode availability. The price convergence is being driven by copper cathode shortages in Europe after exporters began shifting large volumes of the metal into the US earlier in the year owing to concerns that Trump will impose heavy import duties on the metal. Trump officially ordered a section 232 investigation on 25 February into whether copper imports threaten US national security, encompassing all forms of copper, including raw mined copper, copper concentrate, refined copper, copper alloys, scrap and derivative products. Section 232 is the same basis on which the US applied 25pc tariffs on steel and aluminium imports, which it raised to 50pc at the start of the month. Fears that copper could face similar measures spurred exporters to ship material to the US, rapidly draining European and Asian LME warehouses of cathodes. The shift in market behaviour caused LME on-warrant copper stocks to plummet by over 78pc from the start of the year to 54,400t today. Copper prices on the US Comex exchange have surged on the drive to shift metal into US warehouses, pushing the arbitrage between LME and Comex benchmarks to record highs. The arbitrage between Comex spot-month copper and LME cash prices was $868.95/t in favour of Comex on 18 June, down from a peak of $1,862.13/t on 26 March but still easily strong enough to make sellers of Comex-deliverable cathode likely to choose the US option. "Cathode premiums are going up in Europe mainly because of the arbitrage rather than demand, which is not particularly strong," a trader told Argus , referencing that premiums in Europe are at record highs because of critical supply shortages for immediate delivery. The Argus assessment of the delivered Germany copper cathode premium to the LME cash price rose to $270-290/t on 17 June, up by 56pc since mid-March. Offers for cathode were heard at premiums as high as $300/t delivered Germany this week, demonstrating that the shortage is likely to continue to push premiums higher. Sources expect cathode premiums to remain elevated until the Section 232 investigation is officially concluded in late November 2025, which means demand for high-grade scrap will be sustained in the near term. "Because of the lack of cathodes, I have people I haven't heard from in five years come to me asking for scrap," a trader noted, referencing that the current tightness in the cathode market is supporting a higher demand for high-grade copper scrap. Several market participants said they would not be surprised if copper scrap temporarily begins trading at a premium to the LME price in Europe given the scarcity of cathodes. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

SEE gas operators propose changes to Route 1 product

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.

Recent deep-sea and short-sea cfr Turkey scrap deals

19/06/25

Recent deep-sea and short-sea cfr Turkey scrap deals

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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.

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