Rio Tinto to buy out New Zealand Aluminium Smelters

Spanish Market: Electricity, Metals
31/05/24

UK-Australian mining firm Rio Tinto has signed an agreement to acquire Japanese firm Sumitomo Chemical's stake in New Zealand Aluminium Smelters (NZAS) to own 100pc of NZAS.

Rio Tinto will buy Sumitomo Chemical's 20.64pc stake in NZAS for an undisclosed price which will give it full control of the joint venture if all approvals — including from New Zealand's Overseas Investment Office, are secured — Rio Tinto said today.

NZAS operates the Tiwai Point smelter at Southland on New Zealand's South Island, which was expected to close in December, but will now operate for at least two more decades as Rio Tinto signed 20-year supply deals with local utilities Meridian Energy, Contact Energy and Mercury NZ for a combined base-load volume of 572MW. The smelter is the largest single user of electricity in the country, and produced between 333,000-336,000 t/yr over 2021-23.

The power supply agreements are expected to begin in July and run until at least 2044, with the biggest coming from Meridian Energy at 377MW, followed by 100-120MW from Contact Energy and 50-75MW from Mercury NZ. The supply deals — which are subject to regulatory approvals and other conditions — include 20-year demand response agreements with Meridian Energy and Contact Energy, under which NZAS may be requested to reduce electricity consumption by up to a total of 185MW.

"The NZAS decision to extend the smelter life removes significant uncertainty for the electricity sector, which also helps pave the way for new renewable energy to be built," Meridian Energy chief executive Neal Barclay said on 31 May.

Rio Tinto has also signed an agreement to buy Sumitomo Chemical's 2.46pc stake in Boyne Smelters Ltd (BSL), which owns and operates the Boyne Island aluminium smelter in Gladstone, Australia. Rio Tinto's interest in BSL will increase to 61.85pc upon completion of the deal.

Sumitomo Chemical said it held shares in the Australian and New Zealand business for the purpose of importing primary aluminium for resale, but decided to sell its interests as changes in global market conditions led to "high" volatility in profitability and as it looks to strengthen its financial position.

Rio Tinto originally planned to shut down NZAS in August 2021 because of high energy costs and a tough outlook for the sector, but pushed back its decision a few times.

By Juan Weik

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08/01/25

German gas demand edges up in 2024

London, 8 January (Argus) — German gas demand remained largely unchanged on the year in 2024, as a recovery in industrial and power-sector burn was almost completely offset by lower residential and commercial consumption amid mild weather. Germany used about 2.285 TWh/d of gas in 2024, up by 6.6 GWh/d from 2.278 TWh/d in 2023, according to data from market area manager THE ( see yearly graph ). But total gas use remained below the 2018-21 average of 2.7 TWh/d, with the drop in wholesale prices from 2022-23 not supporting a rebound in aggregate consumption. Residential and commercial demand — largely for heating purposes — fell by 5pc year on year in 2024 to 894 GWh/d. Household gas prices remain high and are about double those in 2016-21, according to data from grid regulator Bnetza, which may have weighed on gas use by households and small businesses. Mild weather — especially in the first quarter of the year — also pushed down gas demand from households and small businesses. Temperatures were higher than in 2023 in all but three months in the first three quarters of the year, according to data released by German energy and water association BDEW in late December. The number of heating degree days (HDDs) in Germany was about 4pc below the previous year in 2024, and about 14pc below the 10-year average, according to data from Berlin-based think-tank Agora Energiewende. That said, colder weather in September-December supported a year-on-year increase in heating demand during these months ( see monthly year-on-year graph ). According to preliminary calculations published by Agora Energiewende on Tuesday, mild weather and high consumer prices continue to drive the majority of low heating demand, rather than energy-saving efforts. Without the effect of mild weather, emissions from the built environment — largely caused by heating — would have been higher in 2024 than a year earlier, according to Agora. A return of temperature-adjusted heating patterns to pre-crisis levels as well as slow structural changes, such as plummeting heat pump sales , led Agora to urge for more measures in heat transition policy to drive down gas demand from the built environment. Industrial gas demand up by 7pc despite economic woes German gas demand for use in industrial processes rose on the year, according to Argus estimates, supported by a slight recovery in energy-intensive industry. German industry used about 737 GWh/d for industrial processes in 2024, up from 688 GWh/d in 2023 but well below the 2018-21 average of 877 GWh/d, according to Argus analysis. While German GDP stagnated in 2024 and industrial production continued its downward trend, output from energy-intensive industries such as the chemicals sector recovered slightly, especially in the first half of the year. In addition, gas prices falling below LPG in January and remaining cheaper than LPG for most of the year until the fourth quarter may have encouraged some industrial firms to return to gas where they had previously switched to LPG to reduce energy costs. That said, gas prices rising back above propane and butane parity ( see LPG fuel-switching graph ) and lower output from the chemicals industry in recent months may have slowed the German industrial gas demand recovery . And several plant closures in recent years may similarly constrain any future rebound . Power-sector gas burn up Gas-fired generation increased in 2024 from a year earlier on more favourable generation economics than lignite and hard coal, despite a record renewables share reducing the overall call on thermal generation. Gas-fired generation reached 5.96GW last year, up from 5.88GW in 2023, leading to about 16 GWh/d in additional gas demand for power generation, according to Argus estimates. Gas-fired generation increased year on year despite renewables making up a record 62pc of German power generation. Fossil fuel generation was used to meet 17.1GW of power demand in 2024, down from 19.3GW in 2023. While overall power demand remained roughly unchanged from a year earlier, Germany lifted power imports, pushing down domestic generation ( see power mix graph ). But gas increased its share of the thermal mix, partly on lignite and coal plant closures as Germany's coal phase-out progresses. Gas prices at the bottom of the coal-to-gas fuel-switching range for most of the year until the fourth quarter, even outperforming lignite plants in January-July, supported the call on gas for dispatchable generation. Recent gas price rises have put coal and lignite firmly ahead of gas in the power-generation merit order for all forward periods until 2026, suggesting scope for the share of gas in thermal output to be lower this year. By Till Stehr German power generation mix by year GW TTF versus LPG prices, energy equivalence basis $/mn Btu Monthly year-on-year change in gas demand by sector GWh/d German gas demand by year TWh/d Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Turkey ups some steel product import duties: Correction

08/01/25

Turkey ups some steel product import duties: Correction

Corrects products on which the new duties apply in paragraphs 1-4. London, 8 January (Argus) — Turkey has implemented higher import duties for some steel products, according to a gazette announcement from 31 December. Import duties have increased slightly for some hot-rolled coil (HRC) and cold-rolled coil (CRC) grades, mostly alloyed and stainless, and a small number of previously duty-free alloyed and stainless steel items now face tariffs. But commodity grade non-alloyed duties remain flat at 13-15pc for 2025. The lower end of the range is for re-rolling and pipe-making grades. The duty on non-alloyed cold-rolled products is stable at 17pc and there are no duty reductions if CRC is further processed. Hot-dip galvanised (HDG) imports, including alloyed sheets with a width of 600mm, continue to face a 20pc import duty. The pre-painted galvanised (PPGI) duty is set at 20pc, but duty for some alloyed grades has increased to 20pc from a previous 15pc. Countries under free-trade agreements are exempt, except for certain products from South Korea. If a country is subjected to anti-dumping (AD) duties in Turkey, they are also subject to the import tax. Turkey launched an AD investigation on CRC, HDG and PPGI imports from China and South Korea in the final week of 2024. Dumping duties were levied on hot-rolled coil imports from China, India, Russia and Japan in October. Exporters have the option to import material through the inward processing regime, which allows them to purchase material exempt from all taxes if they commit to processing and then exporting the material within nine months. By Elif Eyuboglu and Brendan Kjellberg-Motton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Strike at Port of Brisbane disrupts urea shipment

08/01/25

Strike at Port of Brisbane disrupts urea shipment

Sydney, 8 January (Argus) — Port operator Qube workers at Australia's Port of Brisbane have started a week-long strike today, which has likely already held up a urea shipment. The work stoppage will affect break-bulk operations, slowing the flow of commodities like fertilizers, steel and vehicles. This comes as a months-long dispute with the Maritime Union of Australia (MUA) drags on across several key ports. The 42,493 deadweight tonne (dwt) Es Dignity , loaded with 32,559t of urea from Qatar, arrived near Brisbane on 7 January, according to trade analytics firm Kpler. This means the ship is unlikely to discharge on 8 January and will be delayed, according to market participants. The vessel previously discharged 8,397t of urea into Townsville on 2 January. Urea is a key fertilizer imported into Australia, and vessels carrying urea typically make multi-port discharges when making deliveries into Australia. The 37,657dwt Tientsin delivered 10,000t of urea into Brisbane on 22 December 2024, after making two 10,000t deliveries into Portland and Newcastle earlier that month. A urea supplier last offered granular urea at around A$760/t ($474/t) fca Brisbane this week. Urea prices in Australia have climbed rapidly in recent weeks, on the back of higher international fob levels in the Middle East and as a weaker Australian dollar made imports more expensive. Argus last assessed granular urea prices fca Geelong in Victoria at A$740-750/t (see graph) , but market participants indicated prices are now higher. But Australian demand for urea is currently low, so the delayed vessel is currently unlikely to impact local supply-demand dynamics significantly. A trader that regularly supplies Brisbane with urea cargoes expects the strikes to persist until at least March, when demand will have picked up and delays will have a larger impact. Port Kembla Qube and MUA have been negotiating an employment agreement since the middle of last year, prompting months of industrial action across the company's Australian ports. The Brisbane work stoppages come alongside an ongoing two-week work stoppage at Qube's facilities at Port Kembla, in New South Wales, which also affected break-bulk operations. "The [MUA's] industrial action has effectively stopped Qube's port operations at Port Kembla and forced our customers to make alternative stevedoring arrangements," a company representative told Argus at the start of the Port Kembla strike. The strikes at Port Kembla have had no impact on fertilizer deliveries so far, with GTT data showing no urea or phosphate deliveries made into the port in January or February in recent years. By Avinash Govind and Tom Woodlock Granular urea prices fca Geelong (A$/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Singapore, Malaysia to collaborate on CCS, RECs

08/01/25

Singapore, Malaysia to collaborate on CCS, RECs

Singapore, 8 January (Argus) — Singapore and Malaysia have signed agreements to collaborate on carbon capture and storage (CCS) as well as renewable energy certificates (RECs). The countries will engage in bilateral discussions to enable cross-border CCS, and discuss the components of a legally binding government-to-government agreement, said Singapore's Ministry of Trade and Industry (MTI) on 7 January. A joint committee comprising members from both sides will be established to facilitate this. The countries will also share best practices and information, and facilitate relevant research projects. The region has strong geological potential for CO2 storage, said the MTI. "Many countries are interested to pursue CCS to support their own decarbonisation plans and position themselves as CCS hubs for Asia-Pacific," it added. Malaysia has a geological abundance of deep saline aquifer reservoirs , which could be used to develop large-scale, permanent CO2 storage solutions. RECs Singapore and Malaysia will also study the formation of a credible framework that recognises RECs associated with cross-border electricity trade. The development of the framework will catalyse demand for cross-border electricity trading projects, which will lead to higher investment that can support the long-term viability of regional renewable energy projects, said the MTI. Singapore's licensed electricity importer Sembcorp Power signed a supply agreement with Malaysia's state-owned utility Tenaga Nasional Berhad (TNB) last month to import 50MW of renewable energy issued with RECs , with the renewable energy to be imported via existing infrastructure. Flows into Singapore began on 13 December. The agreement is part of Malaysia's inaugural "green electricity" sales through its Energy Exchange Malaysia (Enegem) platform, which allows for cross-border green electricity sales to neighbouring countries. Almost 28,000 MWh of electricity has been traded under the Energem platform as of 7 January, according to MTI. State-owned electricity firm Singapore Power and TNB are also undertaking a joint feasibility study to expand interconnector capacity and infrastructure between Singapore and Malaysia, said the MTI. Cross-border power initiatives in the region have been growing, such as the recent increase in capacity of the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) to up to 200MW under its second phase . Inaugural flows from Malaysia to Singapore began in September 2024, and almost 8,000 MWh of electricity has been traded under this phase as of 7 January, according to MTI. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

SMM to wholly own Philippine Coral Bay nickel smelter

07/01/25

SMM to wholly own Philippine Coral Bay nickel smelter

Singapore, 7 January (Argus) — Japanese mining and trading group Sumitomo Metal Mining (SMM) plans to buy the remaining shares of Philippines' Coral Bay Nickel (CBNC) smelter from Philippine firm Nickel Asia (NAC), it said today. SMM currently owns an 84.375pc stake in CBNC, the first hydrometallurgical metal processing plant in the Philippines that adopts the high-pressure acid leaching (HPAL) process. SMM will acquire the remaining 15.625pc from NAC, making CBNC a completely-owned subsidiary of SMM. But no further details about the transaction price or timeline was disclosed. CBNC has the capacity to produce 24,000t/yr of nickel and 2,500t/yr of cobalt. SMM also holds 75pc in the Taganito HPAL nickel facility, another HPAL plant in the Philippines. The firm's other nickel operations include the Niihama Nickel Refinery and Harima Refinery in Japan. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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