Sheinbaum leads in Mexico election to follow AMLO
Ruling party candidate Claudia Sheinbaum was winning Mexico's presidential election by a wide margin today, according to preliminary results, after a race in which she committed to continue President Andres Manuel Lopez Obrador's state-centric energy policies.
Sheinbaum with the Morena party was ahead with 59pc of the vote as of 12am ET on Monday after Sunday's election, according to early results from the national electoral institute (INE), based on less than 7pc of the total votes. She was followed by Xochitl Galvez from a right-left (PRI-PAN-PRD) coalition with 29pc, and Jorge Alvarez Maynez from left-centrist Movimiento Ciudadano with 9pc.
The former mayor of Mexico City and climate scientist vowed during the campaign to boost renewable energy, but also to keep state-owned companies at the center of the market. Lopez Obrador, known as AMLO, had started rolling back then-recent openings for private-sector energy investment when he took office in 2018.
The Morena party began celebrating Sheinbaum's victory, but the opposition had yet to concede the race as of midnight.
Sheinbaum's party and allies are also leading the congressional race, according to preliminary results. Sheinbaum's Morena and allies were ahead with around 55pc of the 500 seats in the lower house, with 35pc for the PRI-PAN-PRD coalition and 10pc for Movimiento Ciudadano.
Morena and allies also were winning a majortiy of the 128 seats in the upper house with similar figures, preliminary results from the INE show.
More detailed results are expected in the coming days, once more than 50pc of the votes are counted.
With Sheinbaum at the forefront of polls for months, the Morena party focused on securing majorities in both houses of congress. But the incumbent party could fall short of the 66.67pc of both houses needed to implement broad constitutional reforms.
Instead, Sheinbaum is expected to continue with Lopez Obrador's energy sovereignty policies and strengthening oil company Pemex and power utility CFE through financial support rather than eliminating the 2014 energy reform from the constitution.
Sheinbaum — who will become Mexico's first female president and the first in North America — has vowed to continue supporting Pemex and CFE, limiting private-sector investment despite the companies' limited financial capacities.
She has indicated during the campaign that there will still be no auctions of areas for oil exploration after the Lopez Obrador government halted these.
In downstream, Sheinbaum has expressed support for major Pemex's refining projects such as two under-construction cokers and the start-up of the long-delayed 340,000 b/d Olmeca refinery, in line with Lopez Obrador's goal to cut fuel imports.
Mexico's government poured around $4bn into maintenance alone at Pemex's aging refineries during the Lopez Obrador administration, in addition to $6bn-$8bn for the uncompleted cokers and a spiraling $16bn-$20bn for the Olmeca refinery.
Pemex's refining system increased its crude processing by 53pc to 975,500 b/d in January-April, up from 639,000 b/d in the same period of 2018 prior to the start of Lopez Obrador's administration.
Mexico also held governor elections in nine states, including Mexico City, but the preliminary results were not yet available.
The country experienced its largest election with nearly 20,000 posts up for election, but also its most violent in modern times with 30 candidates killed.
The next president will take office on 1 October for six years and the new congress will be sworn in on 1 September.
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Cliffs to buy Canadian steelmaker Stelco
Cliffs to buy Canadian steelmaker Stelco
Houston, 15 July (Argus) — US integrated steelmaker Cleveland-Cliffs will acquire Canadian integrated steelmaker Stelco in a cash and stock deal. The acquisition of Stelco, an independent steelmaker in Hamilton, Ontario, was announced by both companies this morning. Stelco shareholders will receive C$60/share ($44/share) of Stelco common stock and 0.454 shares of Cliffs common stock, or $C10/share of Stelco common stock. The transaction is valued at C$3.4bn ($2.5bn) and the deal is expected to close in the fourth quarter of 2024, according to a news release. Stelco will maintain its headquarters in Hamilton, and capital investments of at least C$60mn will be made over the next three years. Stelco will aim to increase production from current levels and will operate as a wholly-owned subsidiary. In its news release, Cliffs said the purchase of Stelco will double Cliffs' exposure to the flat-rolled spot market, adding that Stelco's primary customer base is service centers buying hot-rolled coil (HRC) products. Stelco shipped 636,000 short tons (st) of steel products in the first quarter, of which 74pc was HRC, according to a quarterly report. Cliffs already operates seven tooling and stamping plants in Canada and a scrap yard run by its Ferrous Processing and Trading Company (FPT), all located in Ontario, according to the company. The head of the United Steelworkers (USW) union, David McCall, is said to support the transaction. Cliffs' move to buy Stelco comes nearly a year after Cliffs began its failed bid to purchase steelmaking competitor US Steel. Japanese steelmaker Nippon Steel is now in the midst of negotiating the $15bn purchase of US Steel, a deal that has been the subject of public political hand wringing and open dispute among the executives of Cleveland-Cliffs, US Steel, Nippon Steel and the USW. By Rye Druzin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Pakistan urea demand drops on lower wheat prices: NFDC
Pakistan urea demand drops on lower wheat prices: NFDC
Amsterdam, 15 July (Argus) — Urea consumption in Pakistan fell to 483,000t in June, down by 21pc on a year earlier, with the country's National Fertilizer Development Centre (NFDC) attributing the drop to lower wheat prices and delayed sowing in the summer months. June output fell to 483,000t from 610,000t in the month last year and 737,000t in June 2022. Urea consumption in April-June was down by 18pc at 1.21mn t. The NFDC attributed the fall to lower wheat prices and the delayed sowing of crops in the summer Kharif season, which runs from April-September. But the NFDC did note that urea offtake may pick up in the rest of the season. The dire situation facing farmers has prompted Pakistan's government to impose an indefinite ban on wheat imports into the country, as of 12 July , in a bid to stabilise domestic wheat prices. This may subsequently encourage local urea purchases. The lacklustre consumption so far this Kharif season has eased pressure on urea supplies, with countrywide stocks unexpectedly climbing slightly through one of the peak-demand months of the summer season, up by 6,000t to 231,000t. Domestic production of 497,000t also added some support to inventories last month, but this was down from 548,000t in June last year. Pakistan's state-owned importer TCP has issued a tender to buy 150,000t of urea, closing on 29 July, which will add further support in August-September when cargoes are set to arrive. But the country is still facing a potential tightness of urea supply in July-August, should consumption levels pick-up soon and the import cargoes ship from origins with a long sailing time. The NFDC is projecting consumption of 750,000t and 615,000t in July and August, respectively, which may leave stocks as low as 29,000t by August, without factoring in imports. The cargoes must arrive in Pakistan by 25 September, TCP's tender document stipulated. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Polish gas reforms still needed: Energy Traders Europe
Polish gas reforms still needed: Energy Traders Europe
London, 15 July (Argus) — Recent government plans to amend Poland's onerous gas storage legislation are positive, but more serious reforms are necessary to foster increased competition, industry association Energy Traders Europe told Argus . The Polish government last month said it plans to amend the Act on Stocks in November , removing importers' obligation to maintain mandatory gas storage reserves and placing it on state-owned strategic reserves agency Rars instead. Energy Traders Europe welcomed the move but recommended several further steps to bolster competition and liquidity. The Act on Stocks "needs to be revised first and fast" before addressing other issues in the market, the association's gas market manager, Pawel Lont, told Argus . While shifting the obligation to Rars is a positive first step, Poland would still have "state-enforced storage filling with hardly any capacity left for commercial use", which removes an important flexibility source for the market, he said. Ultimately, storage needs to be reformed to a point at which commercial filling becomes not only possible but desired, Lont said. The government needs to ensure that the system provides an incentive for the storage operator to offer products that are attractive to users, Lont said, noting that currently "this incentive simply does not exist, and this set-up can only inflate the costs of gas consumption in Poland". Energy Traders Europe previously suggested that the strategic reserve should be calculated against the demand of vulnerable customers only, as opposed to all consumers, which would significantly reduce the overall burden and free up space for commercial use. It would also be desirable to move the start date of the draft storage legislation to 1 April 2025 and ensure that licence applications declaring the intention to start commercial activity after this date are tested for compliance with these new rules. It can take a year or more for licence applications to be approved, so "the sooner we start, the better", Lont said, adding that the licensing procedure in Poland is "undoubtedly the most problematic in all of Europe". Applications involve a long list of documents that are difficult to complete in a timely manner. There are also issues on the reporting side, with "an impressive list of 20+ positions reported to different bodies at different points in time" on top of standard EU reporting, Lont said. These obligations create exposure and considerable costs for companies, so it would be beneficial to run a critical review on their necessity, he said. And Polish transmission tariffs are high, although this is understandable given Gaz-System's construction of interconnectors with several neighbouring countries over the past few years. Polish tariffs are decided yearly, while entry/exit splits can also be adjusted, which is problematic for trading companies that would like to book longer-term products. The multipliers and seasonal factors "definitely deserve some rethinking as they severely inflate the costs of short-term capacity products, while booking yearly products in Poland can be quite a bet", he said. But even if these other issues are addressed, "We will [still] be looking at a largely monopolised country, with the dominant player having exclusive access to LNG terminals", Lont said. While the gas release programme is positive for the market, it would be beneficial to see whether Orlen's dominance could be challenged at import terminals. Orlen has booked all capacity at the Swinoujscie terminal, as well as at the planned Gdansk terminal, meaning it continues to be the sole beneficiary of the 100pc discount on entry to the grid from LNG terminals. Several measures could be taken to open other companies' access to the terminals, such as secondary capacity trading, use-it-or-lose-it rules or set-aside rules and limits when allocating capacity to a single entity, Lont said. But these measures would be ineffectual without a guarantee that other firms are ready and willing to book this capacity, so the reforms discussed above need to come first so as to ensure that these participants can actively trade in Poland beforehand, Lont said. In general, it is not unusual to have a dominant company in a given country, but "one just needs an environment in which the group cannot abuse its position and its offer can be challenged", he said. Orlen had a 91pc share of the Polish retail market last year, according to regulator URE. Poland has "all the cards" to develop a liquid gas market, but this takes time, so reforms must get going as soon as possible. Since the change of government, it has at least become "much easier to approach the ministries in Poland", which "helps a great deal on the transparency side", Lont said. By Brendan A'Hearn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Waning German products oversupply evens domestic prices
Waning German products oversupply evens domestic prices
Hamburg, 15 July (Argus) — Germany's recent refined products oversupply, particularly in the south, is waning because of higher demand and technical issues reducing availability. Price differences within the country are starting to level out. Availability of heating oil and road fuels at the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery in Bavaria is restricted. At least one of the refinery's stakeholders is restricting loadings of E5 and 98 Ron gasoline and will probably continue to do so until the end of July. Planned maintenance works on a reformer have reduced production. Diesel and heating oil availability for spot sale are also restricted. A unit outage is affecting the refinery's diesel throughput, and a damaged heating oil tank at Vohburg has restricted loading capabilities since June. Term contracts are unaffected. Demand has increased across the board because of lower domestic prices, after Ice gasoil futures dropped week-on-week. Traded heating oil volumes reported to Argus last week rose especially strongly, by 28pc, and fuel demand also went up. By Natalie Mueller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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