Australia's QPM to focus on gas, cut Tech battery spend
Australian battery metals refiner Queensland Pacific Metals (QPM) will focus on energy markets via its Moranbah gas project (MGP) and limit further expenditure on its Townsville Energy Chemicals Hub (Tech) project.
The firm will switch its prioritisation to its wholly-owned QPM Energy (QPME) business, with QPME's chief executive David Wrench to be appointed as QPM chief executive, the company said on 22 April.
MGP's coal mine waste gas output from nearby the coal mining hub of Moranbah in Queensland's Bowen basin will be increased to 35 TJ/d (935,000 m³/d) by late 2024, up from October-December 2023's 28 TJ/d, with QPME to accelerate production and reserves to provide required peaking power for the national electricity market (NEM) via Thai-controlled energy firm Ratch Australia's 242MW Townsville Power Station.
QPME aims to drill a further seven wells by the year's end, increase workovers and increase production from third-party supply of waste mine gas from regional coal mines.
The company is also seeking to develop a portfolio of plants to supply up to 300MW of gas-fired power to the NEM, while compressed natural gas and micro-LNG facilities will also be developed in Townsville and Moranbah, QPME said.
A surge in government support for renewable power generation in order to meet Australia's 2030 emissions target by retiring coal-fired power means more gas-peaking plants will likely be needed in the coming years to support variable generators. But Australia's domestic gas supply is forecast to experience shortfalls this decade, with predictions of a 76 PJ/yr gap in 2028.
The Tech project which aims to produce 16,000 t/yr of nickel and 1,750 t/yr of cobalt sulphates from imported laterite ore saw its funding significantly reduced in February because of what QPM described as a "challenging investment environment" resulting from depressed nickel prices.
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Jakarta forum calls for exploring Ni price references
Jakarta forum calls for exploring Ni price references
Singapore, 9 May (Argus) — The global nickel market should explore different price references for nickel products to reduce price uncertainty, panellists said at the Third Nickel Producers, Processors and Buyers Conference in Jakarta, Indonesia. The London Metal Exchange (LME) nickel price, which is the global benchmark for class 1 nickel products, has been volatile for years now since LME suspended nickel trading in early March 2022, when prices surged above $100,000/t overnight. There were hopes late last year that prices would become more stable this year. But the price outlook has been uncertain since the turn of the year, with class 1 prices on the London Metal Exchange (LME) slumping to a four-year low of $15,877.50/t on 6 February on expectations of weak Chinese stainless steel and electric vehicle demand, before rebounding to a six-month high of $19,387.50/t on 26 April because of a delay in Indonesian RKAB mining right approvals and a reviewed forecast suggesting a significant smaller surplus for this year. There should be a new reference to counter price volatility, some conference participants said, while others suggested decoupling class 1 and 2 nickel prices. "[Prices are volatile now because] most prices are referenced to class 1, so maybe we can explore further with more price references, like class 2 nickel pig iron (NPI) and mixed hydroxide precipitate (MHP)," Ray Gunara, president-director of Indonesian coal producer Harum Energy, said on 7 May. Harum Energy this year bought a majority stake in an Indonesian nickel processing and refining business. Most conference participants agreed that a different price reference would help maintain nickel price stability. "[NPI prices now are] difficult to predict because the class 1 [prices] are no longer linked to the product we are selling," Indonesia miner Trimegah Bangun Persada (Harita Nickel)'s president-director Roy Arman Arfandy said. Indonesia is the world's largest nickel producer. The correlation between the monthly average of the LME class 1 cash official price and Argus ' NPI ex-works China index has fallen to close to 0.41 between January and May, from 0.91 in 2023. The correlation between the LME class 1 cash official price and Argus ' class 2 nickel benchmark Indonesian Nickel Index (INI) for 10-14pc NPI fob Indonesia was 0.52 between January and May. Market participants at the conference also expressed hope for more government support. "Currently there is an imbalance between local and foreign investments, so we are hoping that the government can give more support to local players like us," one producer said. Another conference participant said that they would aim to build a precursor cathode active material plant if given more support. Argus ' class 2 nickel INI for 10-14pc NPI fob Indonesia stood at $118.70/mtu on 3 May. The INI for 37pc MHP was at $142.80/mtu fob Indonesia and 70pc matte was at $148.90/mtu fob Indonesia on the same day. By Sheih Li Wong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s scrap export tender extends gains for May
Japan’s scrap export tender extends gains for May
Shanghai, 9 May (Argus) — The monthly export tender of Japanese scrap dealer co-operative Kanto Tetsugen continued its upwards trend in May, propelled by a favourable currency exchange rate. The May tender was concluded at ¥52,590/t fas for 20,000t of H2 scrap on 9 May, an increase of ¥1,503/t from April. This brought the fob price to an equivalent of ¥53,590/t or $344.60/t. Two cargoes were settled on 9 May, one of 15,000t and another of 5,000t, both at the same price. Some market participants anticipated the first would go to Bangladesh, as in recent months, while some market discussions were suggesting both were destined for Vietnam. The Vietnamese domestic steel market has shown more signs of a recovery since mid-April. The renewed increase in the export tender was mainly driven by the depreciation of the yen. Despite the significant increase in the tender result, the equivalent price in US dollars only rose by around $1/t compared with the previous month. The yen weakened to ¥155.70 to the dollar from ¥151.80 on 10 April. The Argus H2 fob Japan assessment was ¥50,800/t on 8 May, while the April monthly average was ¥50,757/t fob Japan. Tokyo Steel following the Kanto tender raised the collection price at its Utsunomiya plant by ¥1,000/t and maintained prices at other plants. The increase in the tender result and domestic prices in the Kanto region will raise suppliers' target levels for export business. But overseas buyers may require more time to absorb the gain and await further rises in steel sales prices, a market participant said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s ANZ bank to end new gas, oil lending
Australia’s ANZ bank to end new gas, oil lending
Sydney, 9 May (Argus) — Australia-based bank ANZ has updated its oil and gas policy, with it to no longer provide direct financing to new or expanding upstream oil and gas projects. The bank declared its new policy as part of its 2024 half-year results released on 7 May, saying it would also decline to integrate new customers primarily focused on upstream oil and gas. ANZ said that while it believes gas plays a "material and important part in meeting Australia's current energy needs and will do so for the foreseeable future", it will instead collaborate with energy customers to help finance their transition away from fossil fuels. The bank has a 26pc greenhouse gas (GHG) emissions reduction by 2030 goal and committed in 2020 to exit all lending to companies with exposure to thermal coal, either through extraction or power generation by 2030 as part of lending criteria to support the 2015 UN Paris climate agreement target of net zero GHG emissions by 2050. ANZ has however promised to consider exceptions on a case-by-case basis, if any national energy security issues arise. Australia's banks have been under sustained pressure by environmental groups to exit lending to fossil fuel projects, as upstream gas firms also face shareholder rebellions over climate action plans. But Australia's federal government has conceded gas will likely be needed post-2050 as a firming power source for renewables and industrial feedstock for some sectors. But investment in upstream exploration has been extremely low in recent years, with imports of LNG likely in southern Australia from about 2026 to meet demand for industrial users and power generation. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG imports loom as Australia unveils gas strategy
LNG imports loom as Australia unveils gas strategy
Sydney, 9 May (Argus) — Australia's federal government will attempt to reverse the decline in new gas developments by expediting projects, although a report has found it is unlikely to reverse an anticipated shortfall in southern states' supplies later this decade. Canberra's long-awaited Future Gas Strategy will form its future policy on the resource, following two years of uncertainty for the industrial sector. This follows the Labor party-led government's election in May 2022 and its dumping of the previous Liberal-National coalition administration's gas-fed recovery from Covid-19 policy, which emphasised bringing new supplies on line to drive down rising prices. Six principles have been outlined by the government — driving down emissions reductions to reach net zero emissions by 2050, making gas affordable for users during the transition, bringing new supplies on line, supporting a shift to "higher-value and non-substitutable gas uses", ensuring gas and power markets remain fit for purpose during the energy transition and maintaining Australia's status as a reliable trading partner for energy, including LNG. The report found that gas-fired power generation will likely provide grid firming as renewables replace older coal-fired plants. Peak daily gas demand could rise by a factor of two to three by 2043, according to projections, with gas-powered peaking generation labelled a "core component of the National Electricity Market to 2050 and beyond". But by the 2040s more alternatives to gas for peaking and firming are expected to become available. Supplies are forecast to dip significantly in the latter years of the decade, especially in gas-dependent southeast Australia, driven by the 86pc depletion of the region's producing fields. This reduced supplies will outpace a fall in demand , while rising demand is forecast because of the retirement of Western Australia's coal-fired power plants . The report found the causes of Australia's low exploration investment are "multifaceted", blaming the Covid-19 pandemic, difficulties with approvals processes , legal challenges, market interventions and a perceived decline in social licence. It added that international companies may focus on lower cost and lower risk fields in other countries. New sources Stricter enforcement of petroleum retention leases and domestic gas reservation policies are also likely to increase supplies, the report found, with term swap arrangements beneficial in increasing their certainty. Upwards pressure in transport costs is likely to result from increased piping of Queensland coal-bed methane gas to southern markets such as Victoria state, which could influence industrial users to relocate closer to gas fields in the future. Options canvassed to meet demand include more pipelines and processing plants and LNG import terminals , which would provide the fastest option but must overcome regulatory and commercial pressures, given the pricing of LNG would be higher than current domestic prices. Longer term supplies depend on the commerciality from unsanctioned projects such as Narrabri and in the Beetaloo and Surat basins, the report said. More supplies are needed to support exports under foundational LNG contracts, with an impact on the domestic market if Surat basin developments such as Atlas does not continue, the report said. Forecasts show LNG exporters have sufficient production from existing and committed facilities to meet forecast exports until 2027 if expected investments proceed. But beyond this new investment is required, especially for the 8.5mn t/yr Shell-operated Queensland-Curtis LNG at Gladstone. The Australian Energy Producers lobby, which represents upstream oil and gas businesses, said the strategy should now provide clear direction on national energy policy. But the Greens party, the main federal parliamentary group aside from Labor and the Liberal-National coalition, said any plans to continue gas extraction beyond 2050 will negate state and federal net zero 2050 climate targets. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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