US Fed eases pace of interest rate hikes

Spanish Market: Chemicals, Coal, Crude oil, Electricity, LPG, Metals, Natural gas, Oil products
01/02/23

The US Federal Reserve hiked its target interest rate by the least since last March, noting that inflation had "eased somewhat," even as it reiterated more work is needed to bring down inflation that last year hit four-decade highs.

The Federal Open Market Committee (FOMC) raised the federal funds target rate by 25 basis points, the smallest increase since it began raising rates 11 months ago to quash inflation. It was the eighth rate hike in a row and it followed a 50 basis point hike in December that came after four consecutive 75 basis point hikes. The string of rate increases has taken the target rate to a range of 4.5-4.75pc from near zero at the beginning of 2022 in the most aggressive tightening since the 1980s.

The FOMC reiterated language from prior statements that it "anticipates that ongoing increases in the target range will be appropriate" to return inflation to its 2pc target "over time." It also reiterated that future rate increases "will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."

The slowing pace of rate increases comes as inflation has eased from last year's highs amid mounting signs the economy is slowing. Manufacturing has contracted for three months, home construction and purchases have cooled and consumer spending is weakening. While technology companies have begun mass layoffs in recent weeks, the labor market remains robust, with unemployment at five-decade lows.

By raising the federal funds rate, an inter-bank overnight lending rate whose effects ripple across consumer and business lending rates, the Fed undermines demand for big-ticket items like cars, homes and equipment to rein in pricing pressures.

The US consumer price index in December rose by 6.5pc on an annual basis, the lowest since October 2021 and down from a 9.1pc peak in June, the highest since 1981.

By Robert Willis

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23/04/24

US-led carbon initiative misses launch date

Houston, 23 April (Argus) — The Energy Transition Accelerator (ETA), a global initiative to use voluntary carbon market revenue to speed the decarbonization of developing countries' power sectors, has missed its planned Earth Day launch but continues to prepare for doing business. At the Cop 28 climate conference in Dubai last year, the initiative's leaders said they hoped to formally launch the program on 22 April 2024 . That didn't happen, but the program's leaders last week announced that the US climate think tank Center for Climate and Energy Solutions will serve as the ETA's new secretariat and that former US special presidential envoy for climate John Kerry will serve as the honorary chair of an eight-member senior consultative group that will advise the ETA's design and operations. The ETA plans to spend 2024 "building" on a framework for crediting projects they released last year. ETA leaders said the initiative could ultimately generate tens of billions of dollars in finances through 2035. The ETA also said the Dominican Republic had formed a government working group to "guide its engagement" as a potential pilot country for investments and that the Philippines would formally participate as an "observer country" rather than as a direct participant immediately. The ETA is still engaging Chile and Nigeria as potential pilot countries too, the initiative told Argus . The ETA is being developed by the US State Department, the Rockefeller Foundation, and the Bezos Earth Fund and would be funded with money from the voluntary carbon market. The initiative's ultimate goal is to allow corporate and government offset buyers to help developing countries decarbonize their power sectors through large projects that accelerate the retirement of coal-fired power plants and build new renewable generation. As of now, the ETA's timeline for future changes and negotiations with countries and companies is unclear. The program's goals are ambitious, especially at a time when scrutiny of some voluntary carbon market projects from environmentalists has weighed on corporate offset demand. By Mia Westley 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

23/04/24

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.

USGC LNG-VLSFO discount to steady itself

23/04/24

USGC LNG-VLSFO discount to steady itself

New York, 23 April (Argus) — The premium for US Gulf coast (USGC) very low-sulphur fuel oil (VLSFO) to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel. US Gulf coast LNG prices slipped from a premium to a discount to VLSFO in March 2023 and have remained there since. The discount surpassed 200/t VLSFO-equivalent in January (see chart). Both LNG and VLSFO prices are expected to remain under downward pressure due to high inventories, which could keep the current LNG discount steady. The US winter natural gas withdrawal season ended with 39pc more natural gas in storage compared with the five-year average, according to the US Energy Information Administration (EIA). Henry Hub natural gas monthly average prices dropped below $2/mmBtu in February, for the first time since September 2020, Argus data showed. The EIA expects the US will produce less natural gas on average in the second and third quarter of 2024 compared with the first quarter of 2024. Despite lower production, the US will have the most natural gas in storage on record when the winter withdrawal season begins in November, says the EIA. As a result, the agency forecasts the Henry Hub spot price to average less than $2/mmBtu in the second quarter before "increasing slightly" in the third quarter. EIA's forecast for all of 2024 averages about $2.20/mmBtu. US Gulf coast VLSFO is facing downward price pressure as demand falls and increased refinery activity signals a potential supply build . Rising Gulf coast refinery activity was likely behind some of the drop in prices. Gulf coast refinery utilization last week rose to 91.4pc, the highest in 12 weeks and up by 0.9 percentage points from the prior week. US Gulf coast suppliers are also eyeing strong fuel oil price competition from eastern hemisphere ports such as Singapore and Zhoushan, China, importing cheap Russian residual fuel oil. In general, LNG's substantial discount to VLSFO has kept interest in LNG for bunkering from ship owners with LNG-burning vessels high. The EIA discontinued publishing US bunker sales statistics with the last data available for 2020. But data from the Singapore Maritime & Port Authority, where the LNG–VLSFO discount widened to over $200/t VLSFOe in February, showed Singapore LNG for bunkering demand increase 11.4 times to 75,900t in the first quarter compared with 6,700t in the first quarter of 2023 and 110,900t for full year 2022. By Stefka Wechsler US Gulf coast LNG vs VLSFO $/t VLSFOe 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

23/04/24

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.

India’s Chhara LNG terminal faces commissioning delay

23/04/24

India’s Chhara LNG terminal faces commissioning delay

Mumbai, 23 April (Argus) — Indian state-owned refiner HPCL's 5mn t/yr Chhara LNG import terminal is again facing delays in receiving and unloading its commissioning cargo, a market source told Argus . Fender failure at the terminal has caused problems in berthing the LNG vessel. The fender acts as a buffer or cushion between the ship hull and the dock, and prevents damage as a result of contact between the two surfaces. HPCL on 22 April issued a tender offering the commissioning LNG cargo , which is onboard the 160,000m³ Maran Gas Mystras. The vessel is currently laden offshore the terminal and ready to redeliver to another Indian LNG terminal on 25-30 April, according to HPCL. The company is seeking bids at a fixed price, and custom duty has already been paid by the firm. Indian firm Gujarat State Petroleum (GSPC) facilitate HPCL's purchase of the cargo on 26 March, with the cargo for delivery over 9-12 April. HPCL has put up the commissioning cargo for auction, and it can be discharged from any alternative port in India. LNG terminals closer to Chhara include Indian state-controlled importer Petronet's 17.5mn t/yr Dahej, Shell's 5.2mn t/yr Hazira or state-owned gas distributor Gail's 5mn t/yr Dhabol LNG terminal. HPCL also has not awarded a tender that is seeking another early-May delivery cargo , which closed on 19 April. Commissioning of the Chhara LNG terminal has been delayed since September 2022 owing to pipeline issues. The terminal is the country's eighth LNG import facility, which would lift total regasification capacity to 52.7mn t/yr from 47.7mn t/yr currently. The pipeline runs from the terminal and connects the city gas distribution network from Lothpur to Somnath district in Gujarat. There has been a delay in opening the pipeline as it passes through the eco-sensitive zone of the Gir wildlife sanctuary for 25.816km, a government document shows. The facility was completed in February, but is set to be closed from 15 May-15 September ahead of the completion of a breakwater facility , which is required to ensure safe LNG tanker berthing during India's monsoon season. No specific timeline has been given for building the breakwater, but the terminal will be able to operate year-round once it is completed. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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