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US against EU push to censure Iran for nuclear activity

  • Market: Electricity, Metals
  • 27/05/24

US president Joe Biden's administration is opposing a European push — spearheaded by France — to rebuke Iran for advances in its nuclear program at the UN nuclear watchdog the IAEA's board of governors meeting in June, a diplomatic source with knowledge of the matter told Argus.

"The US isn't enthused about the European effort to censure Iran at the IAEA's member state board meeting in early June," the diplomat said. "But there is a general European atmosphere that is exploring options and measures regarding Iran's nuclear program."

The Biden administration is concerned about the need to manage tensions with Tehran, particularly at what is a highly sensitive moment, the source said.

"Bear in mind, this board of governors meeting is happening around 10 days after the helicopter crash killed (Iran's president Ebrahim) Raisi and (foreign minister Hossein) Amir-Abdollahian" both of whom were primary interlocutors with IAEA director General Rafael Grossi on the nuclear file, the source said.

"There is currently a vacuum in Tehran. Timing is bad," the source said, explaining the US position.

A US State Department spokesman could not be reached for immediate comment.

Concerns among western officials have grown over Iran's nuclear activity in recent years. Former US president Donald Trump in 2018 pulled the US out of a 2015 nuclear deal, resulting in an erosion of strict limits that the agreement had placed on Iran's nuclear program.

Iran, in 2019, began breaching the restrictions and then pushed far beyond them. Tehran has enough highly enriched fissile material for three nuclear weapons, according to the IAEA. Iran is enriching uranium to up to 60pc purity, close to the near 90pc considered to be weapons grade, according to the IAEA.

Grossi in March said inspections in Iran were not what they should have been and called for additional monitoring capabilities, given the depth and breadth of the program.

"On Iran, recent negative developments haven't gone unnoticed. Nuclear threats by Iranian officials, and Grossi's recent interview all sent negative signals," the source said.

The Biden administration has always maintained that it is seeking a diplomatic solution for Iran's nuclear program. And since the conflict between the Gaza-based Palestinian militant group Hamas, backed by Iran, and Israel broke out, the US has attempted to stop the spillover of the conflict into the wider region.

US and Iranian officials have met at least twice for indirect talks in Oman this year.

What are the options?

"There is real concern nowadays within the international community that no one exactly knows where Iran is at the moment when it comes to nuclear enrichment," the source says. The IAEA has lost its "continuity of knowledge" in relation to the production and inventory of centrifuges, rotors and bellows, heavy water and uranium ore concentrate.

"But the options are limited," the source said. The most the IAEA can do if a state is out of compliance with its obligations under the Non-Proliferation Treaty Safeguards Agreement is to report its concerns to the UN Security Council.

Since June 2020, The IAEA's board of governors has adopted three resolutions regarding Iran's cooperation regarding the non-proliferation agreement.

"Two reports are to be published ahead of the meeting in June. Their outcome will set the scene on whether another resolution will adopted or not," the source said.


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24/02/25

Italy's Saipem to merge with Norway's Subsea 7

Italy's Saipem to merge with Norway's Subsea 7

London, 24 February (Argus) — Italy's Saipem and Norway's Subsea 7 have agreed to merge, creating a global energy services company with revenues of around €20bn/yr ($21bn/yr) and an order backlog of €43bn. The move is designed to create the scale to tackle large and complex energy projects focused on engineering and construction (E&C) but also on energy transition projects such as wind and carbon capture. Saipem held talks with Subsea 7 over a possible tie-up several years ago but failed to reach an agreement. "The combination will give us a scale that is more in harmony with the magnitude of the projects in offshore energy for oil and gas and renewables industries," said Kristian Siem, chairman of Subsea 7. Under the merger, Subsea 7 will be folded into its Italian rival, with shareholders of the Norwegian company receiving 6.688 Saipem shares for each share they own, along with an extraordinary dividend of €450mn. Each set of shareholders will hold 50pc of the new company on completion. Saipem's largest shareholders — oil and gas firm Eni and state lender CDP — and Subsea 7's largest shareholder Siem Industries have all entered into a separate agreement to support the deal. The new company, Saipem 7, will have a fleet of more than 60 vessels which management says will give it the flexibility to better respond to client requests. "The new company is very, very much an offshore E&C company," said Subsea 7 chief executive John Evans, noting that over 80pc of its operating income comes from this segment. "The two fleets are very compatible and complementary and will allow clients to have a single global service provider to provide everything from ultra-shallow water in the Middle East to ultra-deep in some of the newer provinces," he said. Asked if the new company would be asset light by leasing more of its vessels, Evans said the model of combining older company-owned ships and leased units would continue. "You have to remember that with our backlogs we will be very busy for the next 2-3 years," he said. The merger is expected to generate annual synergies of around €300m in the third year after completion, driven in large part by fleet optimisation and procurement. It is scheduled to close in the second half of 2026 with a binding merger agreement expected mid-2025. Saipem 7 will be listed in both Milan and Oslo and will be headquartered in Milan, although the offshore E&C business will be run as a separate business based in London. Saipem chief executive Alessandro Puliti, who will take over the role of chief executive at Saipem 7, said any decision to spin off the offshore E&C division at a later stage would be evaluated on an opportunistic basis. Puliti said the new company is expected to pay a dividend of at least 40pc of free cash flow after repayment of lease liabilities. By Stephen Jewkes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Republicans target US energy rules for disapproval


21/02/25
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21/02/25

Republicans target US energy rules for disapproval

Washington, 21 February (Argus) — Republican leaders in the US House of Representatives hope to disapprove at least seven energy-related measures issued under former president Joe Biden using a filibuster-proof process created under the Congressional Review Act. House majority leader Steve Scalise (R-Louisiana) on Thursday released a list of 10 rules that his party has prioritized as "potential targets" for disapproval votes, which require only a simple majority to pass in each chamber. Republicans previously used the law in 2017 to successfully unwind more than a dozen rules, and they hope to do so again to repeal Biden-era rules they say will unnecessarily raise costs on businesses and consumers. A US Environmental Protection Agency (EPA) regulation that implements a $900/t charge on oil and gas sector methane leaks is among the rules that Republicans want to disapprove. If those implementing rules are scrapped, it would provide a temporary reprieve from a 31 August deadline for operators having to pay billions of dollars in potential fees on methane emitted in 2024. Republicans hope to vote later this year to permanently end the methane charge, which was created by the Inflation Reduction Act. House Republicans also hope to disapprove an offshore oil and gas safety rule for drilling in deepwater "high pressure, high temperature" environments that Scalise's office says will increase "burdens on energy operations". Other rules that Republicans will target for disapproval are energy conservation for gas water heaters, energy efficiency labeling standards and air pollution restrictions on rubber tire manufactures. Two of the energy measures House Republicans say they plan to target might not qualify for disapproval under the Congressional Review Act, which can only be used on a "rule". The first is a waiver that would allow California to boost in-state sales of electric vehicles and plug-in hybrids, and that President Donald Trump's administration has tried to make eligible for repeal. The second is the US Commodity Futures Trading Commission's decision to release voluntary guidance for exchanges that allow trading of carbon offset futures. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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German power industry split on capacity market design


21/02/25
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21/02/25

German power industry split on capacity market design

London, 21 February (Argus) — Stakeholders in the German power market are divided on how best to implement a capacity market in Germany, or whether it is needed at all, Argus heard on the sidelines of the E-World conference in Essen last week. Instead of entertaining the "misleading" debate over centralised versus decentralised mechanisms, in which the government tries to "delegate accountability for security of supply", what is really needed is "centralised accountability with decentralised assets", Stefan Joerg-Goebel, senior vice-president for Germany at utility Statkraft, said. "The market should be centrally organised but technologies bidding into the market should include, for example, decentralised demand-side response and batteries," he said. But "only the state can really secure supply". Transmission system operator Amprion prefers a centralised capacity segment with a "local component" over the combined capacity market proposal, according to Peter Lopion, consultant in the firm's international regulation management and market development team. He emphasised the importance of knowing "when and where" power plants will come on line. Amprion also stressed that "incentives for grid-serving behaviour" are needed for batteries in particular . In contrast, a decentralised capacity market — not too dissimilar to that of France — is the "best solution" for Germany, although it would first need to adapt to the "German reality", Davide Orifici, director of public and regulatory affairs at energy exchange Epex, said. Such a system would "better help to integrate flexibility" and "further develop demand response", he said, adding that the impression that a centralised system would be simpler is "false". And a decentralised element is "crucial" to "fully leveraging the potential of the demand side", according to Jan Bruebach, managing director at utility MVV. Nevertheless, the addition of the centralised element would add "long-term security" and thus the German energy ministry BMWK's combined proposal is "fine". And while not specifying a particular design, "something at least similar to a capacity market" is important for security of supply and to "provide incentives to hold capacity on stand-by" during periods of low renewable generation, said Andre Jaeger, senior vice-president of product management at trading and risk management firm Ion Commodities. Kerstin Andreae of energy and water association BDEW agreed at a press conference that Germany "needs" the transition to a capacity market. But Peter Reitz, chief executive of energy exchange EEX, does not see the introduction of a capacity market in Germany as being essential. "The same effect can be achieved much more cheaply by introducing the obligation to deliver into the energy-only market," he said, although a decentralised market would "interfere the least with liquidity". And the introduction of a capacity market in Germany would be "costly", Andy Sommer, head of fundamental analysis and modelling at utility Axpo, said. The costs would probably be absorbed by grid operators and the state, and eventually offloaded on to end-consumers, he said. Energy ministry BMWK in August opened a consultation on the country's future power market system, with four options to finance controllable power capacities: a capacity-hedging mechanism through peak price hedging, a decentralised capacity market, a centralised capacity market, and finally, the ministry's preferred option of a "combined capacity market". Despite the deadline for member states to incorporate the EU-mandated electricity market design having passed on 17 January, the design will "probably" be implemented by the next government, BMWK deputy director Andre Poschmann said at an industry event last month . The capacity market question is likely to draw the most political attention after the federal election on 23 February, Joerg-Goebel said, adding that the successful continuation of the coal phase-out — which is currently an "uncomfortable issue" for market participants — can be "fixed" only with new capacity. And without a capacity mechanism, it will be "very difficult" to invest in new peak generation plants, Bruebach said, with Lopion adding that the coal phase-out is "dependent on" new capacity mechanisms. A bidding zone split would harm liquidity And the decision over whether to split Germany into multiple bidding zones remains a concern, with Argus having heard a general consensus that a bidding zone split would negatively affect liquidity in power trading. Larger price zones acting as a "larger mass" are better for liquidity, according to Reitz, citing the German-Austrian bidding zone split and subsequent reduction in Austrian power liquidity. A split would cause "disruption" to the entire market, owing to regulatory changes and the loss in liquidity, agreed Joachim Bertsch, senior business development manager at utility RWE, while Bruebach said it would "crush" liquidity, disadvantage smaller market participants and drive up costs for industries in the south of the country. While BMWK in August rejected the "reconfiguration" of the single German-Luxembourg bidding zone , the "pressure" to introduce multiple bidding zones will intensify if grid expansion does not, according to Joerg-Goebel, while Parasram said he believes "some form of split" will happen. By Bea Leverett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Global HRC quota could be workable: Eurofer


21/02/25
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21/02/25

Global HRC quota could be workable: Eurofer

London, 21 February (Argus) — A global hot-rolled coil (HRC) quota managed on a monthly basis could be a viable measure adopted by the EU steel safeguard review, according to steel association Eurofer. The idea of a global quota was proposed to the European Commission by Hyundai Steel and the Korean Iron and Steel Association, according to documents obtained by Argus . In a 13 January submission to the commission Hyundai Steel said a global quota allocated monthly would "help ensure smoother trade flows and better supply chain management, preventing distortions that could arise from uneven utilisation of the quota". The fact some countries quickly exhaust their 15pc of the other countries quota risks a "sudden influx" that can flood the EU market, Hyundai said. South Korean mills have their own quota, which typically only fills or goes critical towards the end of the quota period; it went critical earlier in this quarter, however, going critical in the second half of February. The Korean Iron and Steel institute echoed the views of its member Hyundai, suggesting there should be monthly restrictions or increasing tariffs on volumes above the quota level. In a submission to the commission earlier this month, Eurofer said this solution could be workable and prevent "gaming" of the system if accompanied by a first in-first out duty regime — meaning no pro-rata of duties on the first days of a quota — and if its earlier adjustments were adopted. In a 10 January submission Eurofer requested that the flat steel quota should be cut by 50pc to better align quotas with current demand, and that if this was not possible other measures could be taken to reduce import penetration. These measures included the introduction of individual quotas for China and a melt-and-pour rule that means any steel produced using Chinese substrate could come under this quota; this would have most impact on cold-rolled and hot-dip galvanised coil imports produced using Chinese HRC. Eurofer also asked for an increase in the 25pc duty where quotas have been filled; the introduction of first-in first-out, meaning all material pays the fully duty where quotas have been filled; the expansion of 15pc caps to other residual quotas, and the reduction of the HRC residual quota cap to 7.5pc. It also said there should be no carryover of leftover quota between quarters, that more country-specific quotas should be introduced, with a corresponding reduction in residual quotas, and that liberalisation of the quota should be removed. While Eurofer and some importers seem to see eye-to-eye on the idea of a global quota, it is likely that they hold varying views on how much tonnage should be included duty-free. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico central bank slashes '25 GDP outlook on tariffs


20/02/25
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20/02/25

Mexico central bank slashes '25 GDP outlook on tariffs

Mexico City, 20 February (Argus) — Mexico's central bank slashed the country's growth outlook for 2025 by half, citing potential US tariffs. The central bank cut its forecast for gross domestic product (GDP) growth to 0.6pc for the year, from a prior 1.2pc estimate. Growth was 1.5pc in 2024. In making the revision, the central bank said the weaker growth outlook is due to "high uncertainty" over potential US tariffs and other measures taken by the new US administration. The threat of tariffs alone will impact investment and consumption in Mexico this year, the bank added in its quarterly inflation presentation Wednesday, with the uncertainty potentially extending into upcoming discussions over the USMCA free trade agreement. The central bank provided a range of between -0.2pc and 1.4pc for 2025 growth, while 2026 growth should fall within a range of 1pc and 2.6pc. The central bank updated its inflation outlook, with Mexico's year-end annual consumer price index (CPI)estimated at 4.5pc, slower than its previous 4.7pc estimate. However, the bank said more time is needed to bring CPI down to its goal of 3pc, projecting this will occur in the fourth quarter of 2026, a year after its previous estimate. CPI eased to an annual 3.59pc in January, the lowest in four years, as deceleration in agriculture prices offset faster inflation in energy, consumer goods and services. In a 6 February decision, the central bank accelerated its current rate easing cycle, cutting its target rate by a half point to 9.5pc. It said the board is considering cuts of similar magnitudes in coming months, with the next meeting set for 27 March. Board governors addressed the potential inflationary impact that could occur with the enactment of major US tariffs on Mexico, arguing the flexibility of the Mexican peso-US dollar exchange rate should help absorb some tariff impacts. "Conceptually there would be no reason to rule out a scenario where tariffs materialize and at the same time the central bank could cut the target rate by 50 more [basis] points," said deputy governor Gabriel Cuadra, who joined the board earlier this month. Cuadra added the Mexican economy has proven resilient to complex challenges, adding the bank is ready to confront any eventuality with the trade dispute, citing solid foreign reserves and multiple tools for confronting inflationary spikes. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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