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Mexico June trade gap driven by falling crude exports

  • : Coal, Metals
  • 24/08/13

Mexico's trade balance swung to a deficit of $1.04bn in June, impacted by reduced oil exports at lower prices and a weaker peso.

The trade gap in June flipped from a $1.99bn surplus in May, acccording to statistics agency Inegi's final estimate, as exports fell at nearly twice the rate of declines in imports.

Exports fell by 12pc to $48.9bn in June from the prior month, while imports declined by 7pc to $49.9bn from the prior month.

The trade balance was in deficit for four of the six months in the first half of 2024. The deficit in the first half of the year was $5.5bn compared with a $6.5bn deficit a year earlier.

In explaining the June deficit, Banorte cited "a slight moderation in oil prices relative to May, with the Mexican oil mix averaging $73.49/b in the month; a depreciation of the Mexican peso; and the temporary suspension of exports of some agricultural products to the US."

Likewise, exports were down 5.7pc from June 2023, while imports were 3.6pc lower than a year earlier.

The deficit was below Mexican bank Banorte's forecast for a $450mn surplus in June.

Inegi breaks Mexico's trade data into two broad categories of "oil" and "non-oil", where the oil category includes crude, natural gas, oil derivatives and petrochemicals. Non-oil includes everything else from light vehicles and farm goods to copper and other mined minerals,

Exports in the broad oil category declined by 33pc to $2.1bn in June from $3.2bn in May, with imports down by 13pc at $2.82bn in June from $3.23bn in May. Exports were down by 27pc from a year prior, with imports down by 26pc.

Within this, crude exports were valued at $1.73bn in June, a sharp drop from $2.15bn in May and lower than the $2.44bn in the same month of 2023.

Natural gas imports, meanwhile, were valued at $395mn in June from $316mn in May and $469mn in June 2023.

Non-oil exports reached $46.8bn in June, with $15.6bn from automotive exports. This was down by 5pc and 5.2pc, respectively from May.

Still, as reported last week by Mexico's auto associations, auto exports have climbed by 8.4pc in the first seven months of the year from a year earlier.

By James Young


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24/10/15

Chinese steel investment needs to avoid lock in: CBI

Chinese steel investment needs to avoid lock in: CBI

Singapore, 15 October (Argus) — Chinese investment in steel assets needs to be aligned with a Paris-compatible scenario to avoid locking in emissions and stranded assets, according to a report by non-profit Climate Bonds Initiative (CBI). Almost 80pc or 730.8mn t/yr of China's existing coal-based blast furnace capacity will need to be retired or require reinvestment by 2030, CBI said in its report released last week. Steel asset lifetimes often exceed 40 years, so "investment decisions made today can lock in billions of tons of emissions and potentially billions of dollars in stranded assets", CBI added. Steel production currently accounts for around 8pc of global CO2 emissions, and almost 50pc of global steel output is from China, CBI said. China's steel sector is estimated to require at least 1.6 trillion yuan ($226bn) in fixed asset investment for decarbonisation by 2050, according to a joint report by CBI and US-based Rocky Mountain Institute (RMI) earlier this year. Of the Yn1.6 trillion, 33pc should go to energy efficiency, 23pc for electric arc furnaces, 18pc for direct iron reduction (DRI), 14pc for carbon capture, utilisation and storage (CCUS), 7pc for blast furnace hydrogen injection, and 5pc for pellet manufacturing. Green bonds Steel companies can obtain financing through labelled green bonds from various categories at the project level, including energy efficiency, heat recycling, waste and resource recycle, green hydrogen, biomass, and CCUS. A total of Yn4.46 trillion of labelled green bonds had originated from China in domestic and overseas markets as of the end of 2023, according to CBI. But Chinese steel firms had only issued 23 green bonds totalling Yn3.5bn and six sustainability-linked bonds totalling Yn1.6bn by the end of last year, representing 0.1pc of the total Chinese labelled bond market. This Yn5.1bn falls very short of the estimated Yn1.6 trillion needed to decarbonise the Chinese steel sector. CBI asserts that the labelled bond and loan market can supply the required capital, but issuers operating in the steel sector must be encouraged to price deals with the recommended transparency and credibility. Recommendations Several Chinese provinces have already issued provincial-level transition finance guidance, including major steel-producing Hebei province this year. But China's national-level transition finance guidance remains under development. CBI thus recommends that the national transition taxonomy further align provincial guidelines and "enhance interoperability" between Chinese and international transition taxonomies, incentivise low-carbon production methods, customise financing for small-to-medium companies, and enhance entity-level transition plans. CBI also suggests that banks incentivise companies to enhance the quality of their information disclosure and integrate such incentives into their transition frameworks. The non-profit also urged steel companies to issue credible transition plans, which should include Paris-aligned emission-reduction targets and clear capital expenditure plans. Lastly, CBI notes that policies should support hydrogen infrastructure and supply chain development to accelerate green hydrogen deployment for high-emitting sectors. This is especially as current financing to decarbonise heavy industrial sectors have mainly been for mature technologies, such as raising energy efficiency. But green hydrogen can reduce over 90pc of steel production emissions, and steady development in hydrogen infrastructure and supply chain will cut costs and accelerate the steel transition. CBI also flagged public sector steel procurement as an avenue through which the country can boost demand for green steel, especially since Chinese public authorities buy about 350mn t/yr of steel, which causes around 689mn t/yr of CO2 emissions. Green public procurement (GPP) policies in China would also have a global impact, with steel public procurement demand in China three times that of India's total steel demand of 100mn t/yr. CDI suggests that the Chinese government accelerate adopting national-level standards to ensure consistent embodied emissions reporting, as GPP policies will only be effective when implemented with standardised methodologies. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan's Nippon Steel seeks subsidy to build new EAFs


24/10/15
24/10/15

Japan's Nippon Steel seeks subsidy to build new EAFs

Tokyo, 15 October (Argus) — Japanese largest steel producer Nippon Steel has applied for a government subsidy to build new electric-arc furnace (EAF) plants, aiming to accelerate its decarbonisation efforts. Nippon Steel has applied for a government subsidy that provides financial support for hard-to-abate sectors to shift their manufacturing processes to one that emits less greenhouse gases (GHG), according to the company on 11 October. Shifting crude steel production process from its conventional basic oxygen furnace (BOF) to EAF can reduce a significant volume of GHG, but it comes along with a huge amount of capital expenditure, Nippon Steel said. The subsidy amount requested by Nippon Steel is unknown, but the government will allocate a maximum of around ¥500bn ($3.3bn) for the entire funding scheme, according to the ministry of trade and industry (Meti). The subsidy application will close on 28 October. Nippon Steel plans to utilise the public fund to build a new EAF facility at its Yahata plant in the southern Kyushu area. This is to replace the existing BOF facility that is producing 3.6mn t/yr of steel products. The Japanese steel producer also aims to secure the subsidy to build another EAF plant at its Hirohata plant in west Japan area, where Nippon Steel started its first EAF commercial operations in 2022. Crude steel output at the Hirohata is a combined 460,000 t/yr from EAF and BOF facilities, according to the firm, but the breakdown was not disclosed. The Japanese government is likely to approve the Nippon Steel's request to keep the country's decarbonisation strategy on track. Japan aims to hit its net zero emission goal by 2050 and it is critical to reduce GHG emissions from the steel industry, which accounts for 35pc of total emissions in the country's manufacturing industry. Other Japanese BOF firms are also accelerating their shift to the crude steel production with scrap metal, with JFE Steel and Kobelco planning to start commercial EAF operations in 2027 and during the 2030s, respectively. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Wolverine Fuels reopens Utah coal mine


24/10/14
24/10/14

Wolverine Fuels reopens Utah coal mine

New York, 14 October (Argus) — US coal producer Wolverine Fuels has reopened Utah's Fossil Rock mine, which had sat idle for 23 years, after the state's coal output fell to its lowest level since 1992. Wolverine subsidiary Fossil Rock Resources, which owns the mine, "has produced minimal quantities of coal as a result of its rehabilitation efforts" at Fossil Rock, Wolverine vice-president of commercial operations Patrick Barrett said. The underground mine is located in Emery County, Utah, and last produced coal in 2001. Wolverine, formerly known as Bowie Resource Partners before rebranding in 2018, acquired the mine from PacifiCorp's Energy West Mining, nine years ago. Fossil Rock produced 8,611 short tons (7,811 metric tonnes) of bituminous coal in the third quarter, according to MSHA. The producer had around 76 workers at the mine last quarter, up from an average of 34 in the second quarter. Wolverine will mine coal at the Fossil Rock mine in small quantities this year. Then the plan is to have a full longwall panel developed and ready to put in place in the next two years. US Mine Safety and Health Administration (MSHA) officially changed the status of the mine to "active" on 4 September. Back in February, US utility PacifiCorp amended its coal supply agreements with Wolverine for its Hunter and Huntington coal-fired power plants to accommodate anticipated output from Fossil Rock. The coal supply agreement contemplated coal from Fossil Rock being shipped to the Hunter plant, although coal could also be directed to the Huntington plant as needed. PacifiCorp did not immediately respond to a request for comment. Wolverine's initiative to reopen Fossil Rock comes in the wake of a September 2022 fire at American Consolidated Natural Resources' Lila Canyon mine, which is also located in Emery County. That mine was closed in January 2024. Fossil Rock hired some of Lila Canyon's former workers and purchased some of its equipment. The closure of Lila Canyon dealt a blow to Utah coal production. Output in the second quarter of this year fell to 1.03mn st, down by nearly 35pc from the same period in 2023. That was the lowest quarterly production since the fourth quarter of 1992. Some of Lila Canyon's former customers, including 1,800MW Intermountain Power plant, had to use more Colorado, Wyoming and Illinois basin coal this year. The Utah Governor's Office of Economic Opportunity on 11 July awarded Wolverine a post-performance tax credit that was tied to Wolverine's plans to add jobs in Emery County over the next five years. By Elena Vasilyeva Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India industries confident of 2030 renewable energy aim


24/10/14
24/10/14

India industries confident of 2030 renewable energy aim

Mumbai, 14 October (Argus) — Indian industries are confident about reaching the country's renewable energy target of 500GW by 2030, senior executives said at the Financial Times' Energy Transition Summit in New Delhi last week. This is especially given strong capacity installation of solar and wind projects in the coming years, delegates heard. India's renewable energy capacity stands at 199.5GW as of August, a rise of 12pc on the year, data from the Central Electricity Authority show. "India's [renewable] power sector has already grown at a [compound annual growth rate] of nearly 20pc in the last 10 years … The pace at which some of the bids are coming, we should reach 500GW by 2030," said domestic utility Tata Power's chief executive officer Praveer Sinha. A record 69GW of renewable energy tenders were issued during the April 2023-March 2024 fiscal year, surpassing the government-mandated target of 50GW. Tata Power is operating 4.5GW installed capacity of renewable energy that produced 64.6Th of electricity in the April 2023-March 2024 fiscal year. It aims to add another 5GW of installed capacity in the coming years, underscoring its commitment to providing round-the-clock renewable energy through solar, wind, and pumped hydro storage projects, Sinha added. Indian steel manufacturer ArcelorMittal Nippon Steel (AMNS) also plans to add 1GW/yr of renewable energy capacity for its captive power consumption, managing director Dilip Oommen said. AMNS has developed a 975MW hybrid renewable energy project at Alamuru village in India's southern state of Andhra Pradesh. The project will generate 661MW of solar and 314MW of wind power capacity, which will be integrated with a pumped hydro storage facility owned by renewables developer Greenko to overcome the intermittent nature of wind and solar power generation, ensuring round-the-clock power. Power generated from the solar and wind sites will be connected from Andhra Pradesh's Kurnool district via a 400kV interstate transmission system up to AMNS' Hazria facility. The firm is also considering using hydrogen in its electric arc furnace, but remains skeptical about the cost economics. "At present, the cost of hydrogen is $3.50/kg," Oommen said, adding that if this falls below $2/kg, it would be feasible for commercial use at its facilities. The reduction in the cost of renewable power generation over the last few years has also raised interest in the sector, incentivising the coal-dominated eastern regions of India to adopt renewables, said Indian independent power provider Ampin Energy's chief executive officer Pinaki Bhattacharya. The domestic steel sector, one of the country's largest carbon emitters, is looking at ways to reduce emissions in light of the policies under the EU's carbon border adjustment mechanism (CBAM), which will take effect on 1 January 2026. This was echoed during a session on 9 October when India's finance minister Nirmala Sitharaman noted that India has been consistent in promoting domestic investment in renewables and establishing transmission lines. But she described CBAM as "a trade barrier" that could hurt investment in India's heavy industries and hinderthe country's transition away from fossil fuels. CBAM is a "unilateral" and "arbitrary" measure, which would "not be helpful" for India, she said, adding that India's concerns "would definitely be voiced" with the EU. Her sentiments were in line with that of commerce minister Piyush Goyal, who said last year that India will not accept any unfair taxes on steel that the EU imposes under the CBAM. Coal to renewables switch "We are not on track yet to displace coal," said Indian not-for-profit thinktank Centre for Science and Environment's director general Sunita Narain, when asked about India's transition from coal to renewables, considering that coal still dominates the country's electricity mix. Renewable energy generation capacity has currently increased to 13pc of the total electricity mix, but the country needs to hit the 35pc target by 2030, she added. India's power generation continues to rely on coal because of an abundant supply of the fuel as well as its cheaper price over other alternatives. Out of India's total installed capacity of 451GW, coal comprises 48.27pc, followed by solar at 19.84pc and wind at 10.47pc, as of August, data from government think tank Niti Aayog show. By Ankit Rathore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Korea's Posco starts output at new NCA cathode plant


24/10/14
24/10/14

Korea's Posco starts output at new NCA cathode plant

Singapore, 14 October (Argus) — South Korean battery materials producer Posco Future M, a subsidiary of conglomerate Posco, has begun producing nickel-cobalt-aluminum (NCA) cathodes at its plant in Pohang ahead of schedule, citing "customer requests". The 30,000 t/yr NCA cathode plant that sits in North Gyeongsang province's Pohang city was originally planned to start production and sales in 2025. Posco Future M has another NCA plant under construction in South Jeolla province's Gwangyang city, which will have a production capacity of 52,500 t/yr. The firm in 2023 signed a 10-year deal to supply fellow battery manufacturer Samsung SDI with high-nickel NCA cathodes, which will come from some of the lines at the upcoming Gwangyang plant, it said. The company expects to reach 248,500 t/yr of cathode material production capacity by 2026, with 106,000 t/yr from Pohang and 142,500 t/yr from Gwangyang, because of the continuing electric vehicle (EV) market slowdown, it said on 14 October. These capacities are markedly lower from a goal of 320,000 t/yr by 2025 that the firm said in July last year. Posco Future M earlier in September suspended plans to build a nickel sulphate and battery precursors plant with major Chinese lithium-ion battery metal and cathode active material (CAM) manufacturer Huayou Cobalt because of an EV "chasm". The term typically refers to the adoption gap in new technologies between early adopters and mass market consumers, which may be the cause of the slowdown in ex-China EV sales. The firm in September also disclosed that it is pushing back the timeline to complete a 30,000 t/yr high-nickel CAM plant in Canada's Quebec , which is a joint venture with US automaker General Motors, citing "local conditions". The plant was supposed to be completed in the second half of 2024. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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