US inflation gains, core prices ease in December

Spanish Market: Metals, Natural gas
15/01/25

Headline inflation quickened to an annualized 2.9pc in December from a year earlier but core inflation slowed for the first time since August.

The acceleration in the consumer price index (CPI) last month compared with 2.7pc in November, according to the Labor Department. Analysts surveyed by Trading Economics had forecast gains of 2.9pc.

Core inflation, which excludes volatile food and energy, slowed to an annual 3.2pc from 3.3pc the prior month. It came in under analysts' forecasts of 3.3pc.

Traders raised the probability the Federal Reserve will cut its target rate at the June meeting to about 66pc odds from about 58pc Tuesday, according to CME's FedWatch tool. The Fed in December penciled in two likely quarter-point cuts this year but strong job growth and signs of inflation reigniting have been pushing any likely move back later into the year.

The energy index contracted by an annual 0.5pc in December, compared with a 3.2pc decline in November. The gasoline index fell by 3.4pc last month compared with an 8.1pc decline the prior month. Energy services rose by 3.3pc following a 2.8pc gain in November.

Services less energy services, considered a core services measure, rose by an annual 4.4pc in December after a 4.6pc gain the prior month.

Shelter costs rose by an annual 4.6pc following an annual 4.7pc gain the month prior. Food rose by 2.5pc after a 2.7pc gain.

Transportation services rose by an annual 7.3pc in December.

For the month, the CPI rose by 0.4pc following a 0.3pc gain in November that followed four months of 0.2pc gains. Energy rose by 2.6pc in December from the prior month, accounting for 40pc of the monthly headline gain, after rising by 0.2pc in November. Core inflation slowed to a monthly 0.2pc gain after four months of 0.3pc gains.

By Bob Willis

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15/01/25

Tariff war is a lose-lose proposition: Canada

Calgary, 15 January (Argus) — Any retaliation by Canada to tariffs imposed by the US would be designed to apply political pressure, the country's energy minister said today in Washington, DC, but a potential tariff war between the two countries is a lose-lose proposition. "We are not interested in something that escalates," Canada's minister of energy and natural resources Jonathan Wilkinson said in a panel discussion at the Woodrow Wilson Center. But until tariffs are imposed, Canada does not know how it will need to respond. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative. "The point in the response is to apply political pressure," said Wilkinson, who advocated for stronger trade ties between the two countries byway of energy and critical minerals. US president-elect Donald Trump plans to impose a 25pc tariff on all imports from both Canada and Mexico when he takes office on 20 January. So far he has not signaled any plans to exempt any goods, including oil and gas. Alberta's premier Danielle Smith and now Wilkinson are promoting the flow of more crude to ensure North America's energy security. "We can enhance the flow of Canadian crude oil from Alberta," said Wilkinson by boosting capacity on pipelines like Enbridge's 3.1mn b/d Mainline crude export system. "The US cannot be energy dominant without Canadian energy." The incoming administration would be open to such pipeline expansions, said Heather Reams, president of Washington-based non-profit Citizens for Responsible Energy Solutions. "It's something that the Trump administration and Republican members in Congress would be interested in revisiting to ensure that there is a steady flow of the energy that's needed to fuel our mutual economies," Reams said on the panel. Enbridge's Mainline moves Canadian crude from Alberta to the US Midcontinent, where Wilkinson expects consumers will be faced with higher gasoline prices — adding as much as 75¢/USG at the pump — should tariffs be imposed. Americans could also see higher food prices if tariffs are put on potash, a fertilizer mined in Saskatchewan and used by US farmers, she said. Development of critical minerals like germanium, gallium and others should be pursued further to minimize the US' exposure and dependence on China, according to Wilkinson, echoing comments made by Ontario premier Doug Ford on 13 January in his own appeal to enhancing trade ties with the US. "We cannot be in a position where China can simply manipulate the market," said Wilkinson, citing that country's dumping of nickel. "We should form a true energy and minerals alliance." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Risks leave EU buyers with limited HRC options

15/01/25

Risks leave EU buyers with limited HRC options

London, 15 January (Argus) — Impending tighter EU import trade measures, coupled with an unfavourable exchange rate, have stymied buyers' options for hot-rolled coil (HRC) to mostly just domestic and Turkish material. As a result, import volumes between February and June are likely to fall, with very limited trade occurring over the previous quarter. Import trade at the start of January is continuing at a very slow pace, and quota data show January arrivals were already considerably lower than in previous quarters. Exports from Asian suppliers to the EU over the last months of 2024 appear to have dropped, according to available Global Trade Tracker data. In November around 250,000t of HRC was exported from South Korea, Taiwan, Indonesia, China, Australia and Japan to the EU. Most of that will be likely to arrive and clear in the current quarter, as Indonesia and China are exempt from the safeguards, Australia has ample quota availability and South Korea's allocation is regulated. Under 50,000t of what was exported in November, most of which was from Taiwan, is likely to be clearing in April, as it is possible that it did not make it in time to go through customs in January duty-free. November data for large historical suppliers India, Vietnam and Ukraine are not yet available, but volumes from the former two have dropped because of the ongoing anti-dumping investigation. The probe has further stopped the flow from Egypt and Japan. "I don't think EU will buy material from India until 25 March as future duties are not clear," a producer said. "We will all be very cautious — if someone is taking the risk without knowing the anti-dumping rate for the origins under investigation, it is quite a crazy decision," a buyer said. Exports to the bloc from many suppliers are unlikely to resume until there is more clarity on the dumping investigation and the safeguard review. Mills under scrutiny have expressed expectations of duties at 8-10pc, but some traders and buyers say tariffs could be similar to those on China, especially for Vietnam. Import data show that in April last year 1.4mn t of HRC was imported into the EU. Of that amount, Argus estimates over 1mn t could be affected by upcoming trade measures, and around 300,000t worth of supply — from Turkey, Ukraine, South Korea and Serbia — would today be deemed less risky by buyers. While it is likely that those countries could ramp up their exports over the first half of this year, and in fact have already started doing so, there are limits to how much each can supply — be it because of country-based quotas, existing duties, or in Ukraine's case limited production. The safeguard review is likely to see duty-free quota volumes reduce too. In October those four countries supplied around 500,000t to the EU. In January so far, quota data show only 50,000t cleared from Turkey, South Korea and Serbia. Currently, the weaker euro against the US dollar is making imports, even from the above countries, unfavourable, so purchasing is scant. Demand remains a big question. "Buyers are sceptical about demand recovery and inventories are often on the high side leaving buyers some time before returning to the market," a trader said. Despite continued slow demand at the start of the year, reduced import supply will reduce availability in the bloc, which could ultimately boost prices. The Argus northwest EU and Italian HRC indexes have already started moving up since around mid-December, up by €25.75/t and €11.75/t, respectively, as of 14 January. "At the moment EU supply, as well as from Turkey, is more than adequate. For this reason I really doubt that buyers will take many risks. That situation is badly affecting imports but for sure is helping EU producers to defend current prices in a stagnant market in terms of apparent demand," a buyer said. "I would expect lack of material, as no-one is willing to take the risk of a cif purchase from those [higher] risk countries and, and Turkey and the EU may not be enough," a third trader said. By Lora Stoyanova Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

N.EU HRC forward curve flattens

15/01/25

N.EU HRC forward curve flattens

London, 15 January (Argus) — The north European hot-rolled coil (HRC) forward curve has flattened considerably of late, lessening the strong contango of recent months. March traded at €620/t today on the CME Group's north European contract, and June at a slight premium of €623/t. On screen, April also traded at €623/t. Some derivatives participants expressed surprise at the narrow range, as they thought the curve would be firmer on the back of impending import constraints: the European Commission is currently conducting a functional review of its steel safeguard, which was requested by Eurofer and member states. Mills' firmer spot stance is seemingly generating some small restocking at present. Several service centres have reported brisker activity in the past few days, and traders suggest enquiries are also increasing, although it is hard to make imports work at present. The market leader is still offering officially at €630/t base, and has made sales close to €600/t, and higher in some regions. Most other offers are €600/t and above, although one producer is still offering close to €580/t, according to buyers. The curve is still at a fairly strong contango compared with spot prices, with Argus ' underlying northwest EU HRC index averaging €564.50/t so far this month — the index was at €573/t on Tuesday, up by €14.70/t since the start of the month. Over the same period mill margins have widened slightly more, with raw material costs also decelerating. The HRC index was at a €78.89/t premium to Argus ' daily blast furnace-basic oxygen furnace opex cost marker on Tuesday, up from €60.65/t on 2 January. Other participants question the strength of underlying demand, and suggest this is driving the flat curve. Data from the IFO Institute show overall German manufacturing inventory rose to its highest level in over a decade in December, while new orders contracted at the fastest rate since the depths of the Covid-19 pandemic in June 2020. The German economy contracted last year amid high energy costs and difficulties competing in export markets. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Inpex wins Norwegian offshore exploration licences

15/01/25

Inpex wins Norwegian offshore exploration licences

Tokyo, 15 January (Argus) — Japanese upstream firm Inpex has won eight oil and gas exploration permits offshore Norway, expanding its operations in the country, Inpex said today. Inpex was awarded exploration licences PL1263, PL318D, PL1264, PL1257, and PL636D located between the northern North Sea and the southern Norwegian Sea, along with PL 1276, PL1274 and PL1194C in the northern Norwegian Sea through its local subsidiary Inpex Idemitsu Norge (IIN). The successful bid was part of the awards in the pre-defined areas (APA) 2024 licensing round . IIN secured five licenses in the 2023 APA round . The APA rounds are held every year and focus on mature areas of the Norwegian continental shelf. The aim is to facilitate the discovery and production of remaining oil and gas resources in these areas before existing infrastructure is shut down. In the latest round, 33 of the licences are in the North Sea, 19 in the Norwegian Sea and one in the Barents Sea. The latest licences will contribute to expanding its Norwegian business portfolio, Inpex said, given the potential of jointly developing the new assets with existing assets in the surrounding area. The company has continued stable production at the Snorre and Fram oil fields in the northern North Sea. The Japanese firm aims to strengthen its upstream business as part of its long-term strategy, while it invests in renewable energy such as green ammonia. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New York to propose GHG market rules in 'coming months’

14/01/25

New York to propose GHG market rules in 'coming months’

Houston, 14 January (Argus) — Draft rules for New York's carbon market will be ready in the "coming months," governor Kathy Hochul (D) said today. Regulators from the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) "will take steps forward on" establishing a cap-and-invest program and propose new emissions reporting requirements for sources while also creating "a robust investment planning process," Hochul said during her state of the state message. But the governor did not provide a timeline for the process beyond saying the agency's work do this work "over the coming months." Hochul's remarks come after regulators in September delayed plans to begin implementing New York's cap-and-invest program (NYCI) to 2026. At the time, DEC deputy commissioner Jon Binder said that draft regulations would be released "in the next few months." DEC, NYSERDA and Hochul's office each did not respond to requests for comment. Some environmental groups applauded Hochul's remarks, while also expressing concern about the state's next steps. Evergreen Action noted that the timeline for NYCI "appears uncertain" and called on lawmakers to "commit to this program in the 2025 budget." "For New York's economy, environment and legacy, we hope the governor commits to finalizing a cap-and-invest program this year," the group said. State law from 2019 requires New York to achieve a 40pc reduction in greenhouse gas (GHG) emissions from 1990 levels by 2030 and an 85pc reduction by 2050. A state advisory group in 2022 issued a scoping plan that recommended the creation of an economy-wide carbon market to help the state reach those goals. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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