China to set hard targets for curbing CO2 emissions
China is planning a shift in the way it controls greenhouse gases, specifically carbon dioxide (CO2) emissions, in a move that could support progress in its national emissions trading scheme (ETS), although it is unclear what emissions levels will be targeted.
The country currently measures CO2 against economic growth, or emissions per unit of GDP in what is known as carbon intensity. This allows it to tout progress despite rising emissions so long as these do not rise faster than GDP. But it plans to change this.
Beijing aims to incorporate CO2 indicators and related requirements into national plans and establish and improve local carbon assessments in a goal to improve CO2 statistical accounting. This will affect sectors including the power, steel, building materials, non-ferrous metals, and petrochemicals sectors, according to a state council work plan issued on 2 August.
It will evaluate CO2 emissions of fixed asset investments and conduct product carbon footprint assessments while local governments will implement provincial carbon budgets that could enter trials in 2025. The latter will involve a wide range of industries including oil, petrochemicals, coal-to-gas, steel, cement, aluminium, solar panels manufacturing and electric vehicles, among others.
Beijing is hoping such measures will allow it to set hard targets for CO2 emissions from 2026-2030, although the government will still prioritise intensity control in the meantime in what it calls a ‘dual-control mechanism' — switching from controlling intensity to actual emissions of CO2. Provinces are expected to be allowed to further refine this dual control mechanism, suggesting it will may give localities some leeway to adjust.
China's ETS currently includes only the power sector due in large part to challenges collating accurate CO2 emissions data from other sectors, although it is expected to include other sectors like aluminium into the scheme soon.
China unveiled new regulations for its ETS earlier this year, aiming to crack down on falsification of data. It sees the ETS as a tool to help it meet a goal to peak carbon emissions before 2030 and reach carbon neutrality before 2060.
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Mexico 2Q GDP data, surveys point to slower economy
Mexico 2Q GDP data, surveys point to slower economy
Mexico City, 2 August (Argus) — Private-sector analysts have lowered estimates for Mexico's 2024 and 2025 gross domestic product (GDP) growth while raising inflation forecasts for both years, the central bank said Thursday. For a fourth consecutive month, the survey's median forecasts for GDP growth in 2024 declined, with analysts polled lowering growth estimates to 1.8pc for 2024 from 2pc in last month's survey. The 2025 growth forecast slipped to 1.61pc from 1.78pc. The shift in forecasts arrives on the heels of preliminary second quarter GDP data, posted by statistics agency Inegi 30 July, showing the economy grew by an annual 2.2pc in the second quarter, up from 1.6pc in the first quarter but slowing from 3.5pc in the second quarter 2023. The central bank's 2024 GDP estimate was lower than a 2.4pc estimate from Mexican bank Banorte. Median projections for end-2024 inflation in the central bank's private-sector survey for July moved to 4.58pc from 4.23pc, with end-2025 projections rising to 3.83pc from 3.76pc in the June survey. The central bank cited higher risks to inflation from a weakening peso and a potentially severe hurricane season in its latest monetary policy decision on 27 June when it held its target interest rate at 11pc. The peso weakened above 19 pesos to the US dollar Friday for the first time since January 2023, extending the losses triggered after 2 June elections that effectively erased congressional opposition to the progressive Morena party. It has weakened from 16.3 pesos to the dollar early April, its strongest level in more than eight years. Growth in the industrial sector grew by an annual 1.9pc in the second quarter from 0.9pc in the first quarter, while services grew by 2.7pc in the second quarter from 2.1pc in the prior quarter, according to the latest GDP report. Agriculture contracted by 2.7pc in the second quarter from 0.6pc growth in the first quarter. "The economy's exceptional momentum in previous years may be running out of steam," said Mexican bank Banorte in a note on the GDP report. Banorte noted uncertainty in manufacturing, "although some of the early nearshoring-related investments could begin to result into more production. In addition, the auto sector remains strong, key to driving the category forward." The downtrend is supported by comments from ratings agency Moody's out this week, predicting a "substantial slowdown" in the second half of 2024. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US job growth slows sharply in July, jobless rate rises
US job growth slows sharply in July, jobless rate rises
Houston, 2 August (Argus) — The US added 114,000 nonfarm jobs in July, much less than expected, as the jobless rate rose and average hourly earnings growth fell, all signs of an almost certain rate cut from the Federal Reserve next month. Job gains followed downwardly revised gains of 179,000 in June and 216,000 jobs in May, the Bureau of Labor Statistics reported today. Gains were revised down by 29,000 for the two months. Gains in July were well below the average 215,000 jobs added monthly for the prior 12 months. The unemployment rate rose to 4.3pc from 4.1pc. Fed policymakers this week kept their target rate unchanged at 5.25-5.5pc, a 23-year high, but Fed chief Jerome Powell said a possible rate cut was "on the table" for September should the data — especially easing inflation pressures and weakening labor market conditions — keep moving in the right direction. After the jobs report today, the CME's FedWatch tool showed 67.5pc odds of a 50 basis point cut, and 32.5pc probability of a 25 basis point cut at the September meeting, compared with 22pc and 72pc odds, respectively, on Thursday. A rate cut in September would come less than two months before the November national election and would be the first cut since early 2020, when Covid-19 struck the US. Job gains were led by health care, construction, transportation and warehousing. Health care added 55,000 jobs, construction added 25,000 and transportation and warehousing added 14,000 jobs. Manufacturing added 1,000 jobs compared with losses of 9,000 jobs in June. Mining, which includes oil and gas exploration and production, shed 1,000 jobs. Average hourly earnings rose by an annual 3.6pc, down from 3.8pc in June and the lowest since May 2021. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU dumping case could impact over 50pc of HRC imports
EU dumping case could impact over 50pc of HRC imports
London, 2 August (Argus) — The EU's impending anti-dumping investigation into four steel exporters could affect more than half of the bloc's hot-rolled coil (HRC) imports. Next week the commission is expected to officially initiate an investigation into HRC imports from Egypt, Japan, India and Vietnam, in response to a petition from European producers' association Eurofer. In January-May this year, these four sellers accounted for about 51pc of the EU's nearly 4.3mn t of HRC imports; in both April and January of this year, when quarterly quotas reset, they accounted for more than 58pc. This suggests that nearly 2.2mn t of this year's HRC imports could be affected by the investigation, which would create a much more captive market for domestic steelmakers. It is not clear whether dumping will be proven, and market sources suggest this will be difficult in some cases, particularly for Vietnam and Egypt, as domestic prices in Vietnam are regularly below its export deals, they said. But even fairly small duties can affect trade flow, as evidenced by Turkey's reduced competitiveness in the EU in recent years, although aggressive Chinese prices have also had a major impact on this volume of late. "Importing coil is becoming impossible," a service centre source said, suggesting end-manufacturers would buy finished parts from these countries instead of steel, undermining the steelmakers that the investigation is meant to protect. "By standing on the necks of European manufacturers like this, the commission is going to kill consumption in Europe," a trading firm posted on social media. An executive with one trading firm said the commission should exempt low emission steel "if they really care about CBAM [the carbon border adjustment mechanism]". Despite the potential outsize effect of the investigation, physical prices have not moved, given the current market malaise and the typical duration of EU investigations. Since Argus broke the news of the investigation on 25 July, the benchmark northwest EU HRC index fell by €14.75/t to €605/t on Thursday. The typical timeline for EU anti-dumping cases now is for provisional duties at eight months and definitive measures after 14 months, assuming dumping is proven. A steelmaking executive said the dumping case "should support" prices headed into the fourth quarter of this year and the first of next year, by which time service centres' will have destocked and have to return to market. So far, Japan, Vietnam and India have been informed of the case, according to market participants and diplomatic notes seen by Argus . By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South Korea's S-Oil restarts PX unit at low run rates
South Korea's S-Oil restarts PX unit at low run rates
Singapore, 2 August (Argus) — South Korean producer S-Oil restarted its 1mn t/yr paraxylene (PX) unit in Onsan on 1 August and is running at low rates of 20pc, according to a source close to operations. This came after the PX unit was shut on 28 July, because a fire had broken out at an isomerisation unit's heater unit. The PX unit managed to restart after obtaining approval from authorities, despite market participants initially expecting a longer closure because of investigations and the need to pass safety assessments. But S-Oil's isomerisation unit remained closed because of severe damage at the heating facility, so the producer will have to bypass the isomerisation process to produce PX. This means that PX yields would be heavily compromised, with the unit now forced to operate at just 20pc, which translates to 200,000 t/yr of production. The unit previously operated at 80pc before the fire broke out. The firm expects its PX unit to remain at current low run rates, until the isomerisation unit's heating facility is replaced. The replacement is expected to take several months as the technical parts need to be imported. S-Oil have reached out to term contract offtakers in the domestic and export markets toreduce their monthly allocated PX volumes. The company received amicable agreements from all affected parties, said a source close to the firm. Some domestic PX buyers are considering reducing their PTA operating rates to manage the supply losses, said a South Korean PTA producer. South Korean domestic PTA producers are unlikely to urgently seek spot cargoes to fill shortages, as the economics to produce PTA are currently below breakeven point. Average PTA-PX margins stood at $88/t and $87/t respectively for June and July. The industry-acknowledged breakeven point is at $90-100/t, said a South Korean PTA producer. By Alicia Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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