US Fed holds rate, signals possible September cut
The US Federal Reserve kept its target interest rate unchanged at a 23-year high today while signaling a September rate cut "could be on the table" if inflation continues on its easing trajectory.
The Fed's Federal Open Market Committee (FOMC) held the federal funds target rate unchanged at 5.25-5.5pc. The Fed has held rates unchanged since July 2023 after hiking them by 5.25 percentage points from March 2022 in the steepest course of hikes in four decades.
"We're getting closer to the point at which it will be appropriate to begin to dial back restriction," Fed chairman Jerome Powell said after the meeting. "If we get the data that we hope we get, a reduction in the policy rate could be on the table at the September meeting."
The decision to keep rates steady was widely expected.
Following today's meeting, the FedWatch tool, which tracks fed funds futures trading, projected an 81.6pc probability of a quarter point cut at the September FOMC meeting and an 18.2pc chance of a half point cut, compared with 86.3pc chance of a quarter point cut and a 13.2pc probability of a half point cut a day earlier.
The Fed has been battling to rein in inflation, which saw the consumer price index surge to a four-decade high of 9.1pc in June 2022 because of supply chain disruptions caused by the global economic reopening following the Covid-19 pandemic.The Fed's favorite inflation gauge, the Personal Consumption Expenditures (PCE) price index, fell to an annual 2.5pc in June, close to the Fed's long range target of 2pc. The unemployment rate has risen to 4.1pc in June from 3.5pc in July last year.
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South Korea’s scrap imports slump in 1H 2024
South Korea’s scrap imports slump in 1H 2024
Singapore, 31 July (Argus) — South Korea's ferrous scrap imports fell by nearly 50pc from a year earlier in this year's first half, customs data show, with a prolonged bearishness in downstream steel markets that prompted domestic mills to shun imported scrap and focus on domestic material. Shipments from Japan in June accounted for 72pc of South Korea's net imports. South Korea was the sixth-largest crude steel producer in June, World Steel data show, producing 5.1mn t that took the first-half total to 31.5mn t and a 6.4pc fall from a year earlier. South Korea's construction sector faltered in June with falling investment reflecting a downturn in the real estate market. Overall economic activity was weighed down by elevated interest rates and high corporate sector debt. Asian regional steel producers have been grappling with significant oversupply issues from China, which drove down steel product prices. Despite some government stimulus to help support the real estate sector, they have been insignificant and too modest to make an impact. Asian steel mills will continue to struggle as China's steel industry continues to keep production rates high, despite weak domestic demand and margins. South Korea ferrous scrap imports (t) Jun % ± vs May % ± vs Jun '23 Jan-Jun % ± y-o-y Japan 123,004 45.1 -61.0 818,252 -46.4 US 5,912 9.0 -87.9 72,088 -67.6 Russia 29,362 15.1 -37.5 120,702 -33.0 Others 11,561 -36.8 -62.1 113,017 -42.0 Total 169,839 26.8 -61.5 1,124,059 -47.1 Source: customs Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
APLNG gas output rebounds in 2023-24: Origin
APLNG gas output rebounds in 2023-24: Origin
Sydney, 31 July (Argus) — The 9mn t/yr Australia Pacific LNG (APLNG) project in Queensland state produced and sold more LNG in the 2023-24 fiscal year to 30 June than the previous year, upstream operator Australian independent Origin Energy said in its April-June results. APLNG's 2023-24 output totalled 694PJ (18.53bn m³) or 3pc higher than a year earlier when it produced 674PJ, while sales of 665PJ were also 3pc up on 2022-23's 645PJ. APLNG's guidance for the year was 680-710PJ. The 2022-23 fiscal year was affected by cumulative wet weather that Origin said cut APLNG's output from 693PJ in 2021-22. This improved result was because of well and field optimisation Origin said, offset by the stranding of an LNG carrier at APLNG's wharf in Gladstone harbour last November that led to a temporary fall in gas production. APLNG exported 127PJ (2.29mn t) of LNG through 33 cargoes for April-June, 4pc down from 132PJ and 34 cargoes the previous quarter and 1pc down on the 128PJ and 33 cargoes shipped in April-June 2023. APLNG delivered 15 spot cargoes in 2023-24, up from seven the previous year. Total LNG sales for 2023-24 from APLNG were 503PJ, up from 495PJ a year earlier, with 130 cargoes up from 128 in 2022-23. The project's average realised LNG price for 2023-24 was $11.85/mn Btu, down by 17pc from $14.20/mn Btu a year earlier. APLNG provided Origin with A$1.367bn ($888mn) in cash distributions for 2023-24, net of Origin's oil hedging. The average National Electricity Market spot price for April-June was A$134/MWh, up by 14pc from A$118/MWh a year earlier, Origin said, with its 2,880MW Eraring coal-fired power station's output for 2023-24 up by 2.1TWh on 2022-23 to 14.3TWh. Eraring, which will now run at least two years longer than expected following a deal with the state government, benefited from the A$125/t coal price cap during 2023-24. Its weighted-average coal price is expected to be A$30/t higher in 2024-25, Origin said. By Tom Major Origin Energy results Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 y-o-y % ± q-o-q % ± Production (PJ) 175 176 176 -1 -1 Sales (PJ) 177 168 165 7 5 Commodity revenue (A$mn) 2,602 2,303 2,471 5 2 Average realised LNG price ($/mn Btu) 11.70 12.17 12.24 -4 -4 Average realised domestic gas price (A$/GJ) 9.30 6.90 6.79 37 35 Source: Origin Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU arbitrage opening for lowest-duty Chinese HRC
EU arbitrage opening for lowest-duty Chinese HRC
London, 30 July (Argus) — Sales opportunities could be opening up for Chinese hot-rolled coil (HRC) exports to the EU. Chinese exporters are subject to both anti-dumping (AD) and countervailing duties (CVD) in the bloc, with the combined lowest for Hesteel and Handan at 18.1pc. Both are subject to 10.3pc for AD and 7.8pc for CVD. Chinese HRC prices have today hit another low, with the Argus fob China assessment at $480/t fob. Lower Chinese offers were heard available too into some destinations. With freight at around $50-60/t from China to the EU, and a combined duty of 18.1pc, the duty included price comes to just over $630/t cfr, or €580-590/t cfr. There have been offers into the EU lately from risk-free origins at €580-590/t, either exempt from safeguards or with ample quotas. They are of limited interest at present, given weakening domestic prices. China itself is not subject to the EU's safeguard measures under product category 1, HRC. So, should the arbitrage remain, China is relatively risk free compared with countries with individual or capped quotas. Potential dumping cases on sellers under the other countries' quota could also increase the perception of China as a safer option. Some large EU buyers have the ability to purchase Chinese HRC without paying dumping duties provided the material is processed and exported outside the EU. Chinese export prices have come under further pressure this week after the launch of an anti-dumping investigation in Vietnam on Chinese HRC — Vietnam has been a key market for China, which shipped over 4mn t to the country in the first six months of this year, compared with just over 6mn t in 2023. Brazil has recently also clamped down on imports, introducing tariffs that mainly target Chinese imports. India is expected to initiate a dumping case on Chinese HRC, while market participants suggest Taiwan could also announce a case soon. By Lora Stoyanova and Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Montfort aims to restart Fujairah refinery in August
Montfort aims to restart Fujairah refinery in August
Dubai, 30 July (Argus) — The 67,000 b/d Fort refinery in Fujairah, the UAE, aims to resume production in August after halting operations in May because of a lack of feedstock, the plant owner told Argus . The refinery is owned by a consortium comprising trading group Montfort and a UAE-based investment group owned by Sheikh Ahmed bin Dalmook al Maktoum. The Fort refinery is a major producer and exporter of 0.5pc marine fuel — or very low-sulphur fuel oil (VLSFO) — with a maximum 5mn t/yr production capacity, but it has been unable to import feedstock from South Sudan because of damage to a pipeline carrying heavy sweet Dar Blend crude. Crude from South Sudan remains the preferred option, but the refinery operators have been looking into other options in order to restart the plant. "We have analysed different flexible and profitable business models, and we are planning to restart production in August," said Montfort Investments' head of corporate affairs Joya Chehab. He said the owners "remain committed to the refinery and take a long-term view on managing the refinery." The prolonged absence of Fort's VLSFO, the main marine fuel used by vessels, has led to an increase in imports to Fujairah, the world's third largest bunkering centre, in the May-July period. Arrivals rose by 56pc on the year to 36,000 b/d to compensate for the fall in local production, according to global trade analytics firm Kpler. By Elshan Aliyev Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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