US poised to become coke short in 2019: DTE

Spanish Market: Coking coal, Metals
08/11/18

Rising US metallurgical coke consumption and tightened production capacity could lead to the country developing a structural shortage of met coke next year.

"Looking out to 2019 there's a chance that the US will go, for the first time in years, from being coke long to slightly coke short," US firm DTE Energy's director of coal trading, Mike Nobis, said at this week's MetCoke World Summit in Pittsburg. The country will probably need some imports "here and there to balance things out around the edge", he added.

One US steelmaker made enquiries in Europe for some additional met coke in August, but market participants said the move was indicative of localised supply tightness rather than a structural US shortage.

But the impact of US Steel restarting two blast furnaces at its Granite City plant in the first half of this year is taking hold, tightening the domestic met coke market.

Furthermore, Nobis pointed out that US coke production capacity has tightened since steel capacity utilisation rates previously touched 80pc, such as during the 2016 closure of DTE's Shenango coke plant on Neville Island — a casualty of the last market downturn.

Just last month, the Tonawanda foundry coke plant in North Buffalo was shut down. "It was announced overnight and took a lot of us by surprise," a coking coal producer said on the sidelines of the conference. Tonawanda Coke had been caught up in legal disputes surrounding pollution concerns and air toxicity, and has since filed for Chapter 11 bankruptcy protection.

There is some scope for product replacement to offset particular tightness in certain parts of the coke market, such as using more nut coke when there are shortages of furnace coke, Nobis said. But there are limits to how far the balance can be adjusted, and this will vary depending on the facility.

Market participants see little potential for construction of new met coke facilities for now, citing lengthy permitting processes and reluctance on the investment side.

But conference delegates are cautious about the longer-term outlook for US steel production growth and met coke demand, with several expecting the market to balance out and numerous metrics to return in the medium term to levels seen before implementation of the US' Section 232 tariffs on steel and aluminium imports.

Consultancy Wood Mackenzie's director for global metallurgical coal markets, Jim Truman, said the company had initially thought the Section 232 tariffs would remove around 10.6mn t/yr of US steel imports, to be replaced with domestic production and equating to a 3.8mn t/yr rise in US coking coal requirements. But the reality has been more muted, with imports so far in 2018 down by around 5.2mn t compared with a year earlier, and steel production expected to be up by 4.5mn t, according to Wood Mackenzie estimates.

"In the long term, we think things will balance out and steel imports will return to their previous level," Truman said, noting that the 25pc steel import tariff has resulted in a rise of around 50pc in local steel prices.

There are also constraints to US steel production growth at an equipment level, a domestic coking coal supplier said. "A lot of facilities start running into trouble and have problems if you push [capacity utilisation] rates much above say 84pc," he said.

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19/04/24

India mulls using more natural gas in steel sector

Mumbai, 19 April (Argus) — India's steel ministry is considering increasing natural gas consumption in the sector as it aims to lower carbon emissions from the industry. Steelmakers held a meeting with the steel ministry earlier this month, to discuss challenges and avenues to increase gas allocation to the sector, according to a government document seen by Argus . Steel producers requested that the government set gas prices at an affordable range of $7-8/mn Btu for them, to make their gas-based plants viable, as well as for a custom duty waiver on LNG procured for captive power. India's LNG imports attract a custom duty of 2.5pc. City gas distribution firms sell gas at market-determined prices to steel companies. Representatives from the steel industry also requested for the inclusion of gas under the purview of the country's goods and service tax, and to be given higher priority in the allocation of deepwater gas, which has a higher calorific value. Deepwater gas is currently deployed mostly to city gas distribution networks. Steelmakers are currently undertaking feasibility tests for gas pipeline connectivity at various steel plants. But a gas supply transmission agreement requires a minimum five-year period for investment approval. The steel industry is heavily reliant on coal, and the sector accounts for about 8-10pc of carbon emissions in the country. A task force of gas suppliers including IOC, Gail, BPCL, Shell, and HPCL and steel producers like Tata Steel, AMNS, All India Steel Re-roller Association and the Pellet Manufacturers Association has been set up, and the team is expected to submit a report on increasing natural gas usage and lowering carbon emissions by 15 May, the government document said. This team is one of the 13 task forces approved by the steel ministry to define the country's green steel roadmap. The steel ministry aims to increase green steel exports from the country in the light of the policies under the EU's Carbon Border Adjustment Mechanism (CBAM), which will take effect on 1 January 2026. Under the CBAM, importers will need to declare the quantity of goods imported into the EU in the preceding year and their corresponding greenhouse gas emissions. The importers will then have to surrender the corresponding number of CBAM certificates. CBAM certificate prices will be calculated based on the weekly average auction price of EU Emissions Trading System allowances, expressed in €/t of CO2 emitted. This is of higher importance to Indian steelmakers as the EU was the top finished steel export destination for Indian steelmakers during the April 2022-March 2023 fiscal year with total exports of 2.34mn t, and has been the preferred choice for Indian steel exports in the current fiscal year owing to higher prices compared to other regions. Indian steelmakers have started to take steps to lower their carbon emissions by announcing collaborations with technology companies to decarbonise, and are trial injecting hydrogen in blast furnaces, and increasing the usage of natural gas in ironmaking. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Pilbara Mining sees continuing Li demand

19/04/24

Australia’s Pilbara Mining sees continuing Li demand

Singapore, 19 April (Argus) — Australian mining firm Pilbara Minerals' sees continuing lithium demand from its customers, while the firm continues to focus on cost optimisation. Pilbara in March accepted a pre-auction offer of $1,106/dry metric tonne (dmt) for 5,000dmt of 5.5pc-grade lithium concentrate (spodumene) cif China. The price equates to approximately $1,200/dmt 6pc-grade lithium concentrate (spodumene) cif China, said Pilbara, which reflects the "ongoing demand and positive pricing for unallocated production volume". "When you look at the past 60 days up to mid-April, the increases [in lithium prices] are fairly material," said the firm's managing director and chief executive Dale Henderson during the latest quarterly earnings call, adding that the recent uptick in lithium pricing is "comforting". Argus -assessed prices for 6pc-grade lithium concentrate (spodumene) held stable at $1,100-1,200/t cif China on 16 April from a week earlier, rebounding from an all-time low of $850-1,050/t on 27 February. But a standoff has more recently formed between spodumene producers and lithium refineries, with the former maintaining their offer prices and consumers rejecting them. Pilbara's spodumene realised price in January-March fell by 28pc on the quarter to $804/dry metric tonnes (dmt) cif China, despite the average grade of spodumene shipments rising by 0.1 percentage point to 5.3pc, which translates to $927/dmt for 6pc-grade lithium concentrate (spodumene). But the realised price during the quarter remained above its unit operating cost of $519/dmt cif China, which fell by 1pc on the quarter. Pilbara's ending cash balance came in at A$1.8bn ($1.15bn) as at 31 March, down from A$2.1bn a quarter earlier. Output Pilbara's output during January-March rose by 2pc on the quarter and by 21pc on the year to 179,000dmt. The output was propped up by a record monthly production of over 80,000dmt in March, partly because the P680 primary rejection facility reaching its nameplate production capacity in the second half of the quarter. But its chief operating officer Vince De Carolis said the peak performance should not be construed as an annualised run rate. The firm said it is not stockpiling its production volume as it sees "ongoing customer demand". Pilbara's spodumene sales volumes rose by 3pc on the quarter and by 14pc on the year to 165,121dmt for an average 5.3pc grade. Pilbara earlier in February defended its lithium downstream strategy and last month signed a binding agreement with Chinese refiner Ganfeng to carry out a joint feasibility study as they explore building a downstream conversion plant. The two firms are exploring building a lithium hydroxide and/or lithium carbonate conversion plant with 32,000 t/yr of lithium carbonate equivalent capacity, alongside a potential intermediate lithium chemical facility in the country. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Coal sales at Australia’s Whitehaven fall in Jan-Mar

19/04/24

Coal sales at Australia’s Whitehaven fall in Jan-Mar

Sydney, 19 April (Argus) — Australian coal miner Whitehaven reported higher production but lower sales in January-March, with the firm increasing its percentage of high-grade thermal coal sales from the previous quarter. Saleable coal volumes rose by 8pc on the year to 3.9mn t but managed coal sales fell by 7pc to 3.8mn t compared to a year earlier. Sales were 83pc high-grade thermal, higher than 72pc in October-December and 68pc a year earlier. Whitehaven said run-of-mine production at Narrabri was below expectations because of the current panel's geological challenges, leading to reliability and maintenance problems with equipment. Whitehaven's overall sales guidance for the 2023-24 fiscal year remains unchanged at 16mn-17.5mn t for 2023-24 with a unit cost guidance, excluding royalties, of A$103-113/t ($66-$72/t) which the firm said is tracking at the top end. This is because of lower output from Narrabri, which is tracking below its output guidance of 5.1mn-5.7mn t for the fiscal year to 30 June. Whitehaven finalised takeovers of Australian-Japanese joint venture BHP Mitsubishi Alliance's (BMA) 12mn t/yr Blackwater and 4mn t/yr Daunia coking and thermal coal mine in Queensland on 2 April, with initial sales and production data to be reported in its April-June production report. The two mines are anticipated to deliver 4.5mn-5mn t run-of-mine output in April-June, with Whitehaven's revenue breakdown to be 70pc metallurgical and 30pc thermal on an annual basis post-acquisition as it seeks to pivot toward coking coal. Blackwater and Daunia contributed 10.11mn t and 4mn t respectively to BMA's total output in 2023. Whitehaven plans to sell down a 20pc stake in Blackwater to global steel producers, with a process presently underway. Whitehaven views the high calorific value (CV) thermal coal market as well supported in its key Asian markets, and said tightening of sanctions on Russian exporters is containing global supply. India's continuing growth is driving demand and underpinning price sentiment, Whitehaven said, despite a softening in metallurgical coal prices during the quarter . The Argus high-grade 6,000 kcal/kg NAR price averaged $126.74/t fob Newcastle and the 5,500 kcal/kg NAR coal price $93.85/t during January-March, compared with $134.23/t and $96.80/t respectively for October-December. By Tom Major Whitehaven quarterly results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 Volumes (mn t) Managed coal production 3.9 4.2 3.6 Managed coal sales 3.8 4.7 4.1 Managed coal stocks at period end 1 1.5 1.5 Coal sales mix (%) High-grade thermal coal 83 72 68 Other thermal coal 8 19 26 Metallurgical coal 9 9 6 Prices achieved ($/t) 136 142 280 Thermal coal 136 142 280 Metallurgical coal 213 166 234 Source: Whitehaven Australian coal price comparisons ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

ISRI rebrands to ReMA, drops scrap from name

18/04/24

ISRI rebrands to ReMA, drops scrap from name

Las Vegas, 18 April (Argus) — The Institute of Scrap Recycling Industries (ISRI) has rebranded to the Recycled Materials Association (ReMA). The new name and rebrand better reflect the evolution within the recycling industry and its member companies, ReMA said at the group's annual convention and exposition in Las Vegas today. Washington, DC-based ReMA represents recycling industries including ferrous and nonferrous metals, electronics, glass, paper, plastics, textiles and tires and rubber. It is a member-driven trade organization that provides advocacy, education, safety and compliance training, and promotes public awareness of the vital role recycled materials play in the US economy, global trade, the environment and sustainable development. ISRI was formed in 1987 when the Institute of Scrap Iron and Steel merged with the National Association of Recycling Industries. Over the last 35 years, the association has seen tremendous growth in size and diversity of its membership, particularly in electronics, consumer brands and EV battery sectors. The trade association has around 1,700 member companies across the US and other 40 countries. By Brad MacAulay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

BHP cuts Australian met coal sales guidance again

18/04/24

BHP cuts Australian met coal sales guidance again

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