OECD highlights Chile’s green transition potential

Spanish Market: Electricity, Metals
15/01/25

The energy transition holds the potential to boost Chile's stagnant economic growth, the Organization for Economic Cooperation and Development (OECD) said in a report published today.

Chile's high renewable energy potential and "vast" lithium and copper reserves put the country in the right position to benefit from the switch to cleaner energy, according to the OECD Economic Survey of Chile 2025.

But the country must simplify regulation, boost investment, upgrade electricity transmission and port infrastructure, and increase carbon prices to meet its climate targets and harness the benefits of the energy transition, it said.

Chile's massive renewable energy potential is built on its OECD-leading photovoltaic power possibilities and the world's best onshore wind resources in the Magallanes region in the far south, it noted.

It needs to streamline permitting processes that often exceed legal permit reviewing times, making "investment approvals costly and lengthy," it said.

Chile's tax on carbon emissions of $5/t of CO2e is low by international standards and insufficient for the country to meet its emission reduction targets, the report said. The country plans to increase the tax to $10/t on sites that emit more than 25,000t/yr of CO2.

The OECD also highlighted the country's need to ensure fiscal sustainability, foster women's participation in the labour market and accelerate productivity through digitalization and innovation to bolster growth.

The country's income convergence with more advanced OECD economies has stalled since 2012, it said. GDP rose by 2.4pc in 2024, up from a 0.3pc increase in 2023, on the back of postpandemic "adequate macroeconomic policies".

By Emily Russell

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15/01/25

Hyundai eyes new southern US steel mill

Houston, 15 January (Argus) — South Korean steelmaker Hyundai Steel has confirmed it may build a new steel mill in the southern US. A company spokesperson said in an email Hyundai Steel is reviewing whether it will invest in an electric arc furnace (EAF) steel mill, but that the project has not been confirmed yet. Hyundai Steel has 24mn metric tonnes (t) (26.5mn short tons) of steel production, all in South Korea. That production is split 50-50 between blast furnace and EAF steelmaking processes, according to the company's website. The blast furnaces serve the automotive, construction, and shipbuilding industries with steel sheet, plate, and welded pipe, while the EAFs produce rebar, H-sections, and other products for construction and shipbuilding. If the mill is built it would be Hyundai Steel's first outside of South Korea. There are eight EAF and re-rolling flat-rolled steel mills in the southern US operated by different steelmakers that have a combined 23.8mn t (26.25mn st)/yr of production capacity. The spokesperson did not clarify what products the mill would produce or what industries it would supply. Hyundai Steel's parent company, Hyundai Motor Group, operates a nearly 400,000 vehicle/year automotive plant in Alabama. Hyundai Motor Group's subsidiary Kia has its own 350,000 vehicle/year auto plant in Georgia. President-elect Donald Trump has threatened to impose blanket tariffs on US imports after he assumes office on 20 January. Hyundai announced more than $10bn of investments in the US in May 2022, including a $5.5bn new electric vehicle (EV) and battery manufacturing plant in Georgia that will have a production capacity of 300,000 vehicles. By Rye Druzchetta Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Seoul may scale down nuclear expansion plans

15/01/25

Seoul may scale down nuclear expansion plans

The delay to finalising the country's nuclear goals may make it unfeasible to build sufficient capacity before current assets expire, writes Evelyn Lee London, 15 January (Argus) — South Korea's energy industry has faced a whirlwind of challenges since the impeachment of now-suspended president Yoon Suk-Yeol, with the political turmoil stalling a crucial review of its energy strategy in the national assembly. The government is now seeking to scale down its nuclear expansion ambitions in order to hasten the plan's review. Yoon's surprise declaration of martial law last month was reversed within six hours owing to bipartisan political pressure and widespread protests, which resulted in a national assembly vote in favour of the president's impeachment and his subsequent arrest on 15 January. Yoon is suspended from office pending a ruling by the country's constitutional court — due within six months of the impeachment vote on 14 December. If six out of nine justices vote to uphold the impeachment, Yoon will be removed from office and presidential elections will be held within 60 days. South Korea acted quickly following the martial law declaration, but government action has overall been slowed down by the political turmoil — including on energy policy. The latest draft of its long-overdue electricity plan was completed in June and scheduled to be submitted to the Trade, Industry, Energy, Small and Medium-sized Enterprises and Start-ups Committee of the national assembly by the end of last year. But the committee has suspended general meetings since 19 December, according to schedules released on its website. The long-term electricity plan is renewed every two years and serves as a basis for business planning, especially for state-controlled companies. Gas incumbent Kogas' procurement strategy has historically reflected the electricity plan. The latest draft lays out Seoul's intention to build three more nuclear reactors by 2038. But planning and construction would take nearly 14 years, according to the government, so the delay in finalising the plan could result in a power supply shortfall by 2038 — when 9.15GW of existing nuclear capacity is set to expire. Nuclear fallout The government may opt to scale down its nuclear expansion ambitions in order to get the draft electricity plan seen by the committee — which must review the plan, although it is not required to approve it. And less nuclear capacity could increase the need for more gas-fired capacity. The energy ministry pledged on 8 January to finalise the plan by June, after which it will pass related bills including the power grid act, but it did not say how it intends to progress the plan in the national assembly. The Korean Nuclear Society (KNS) responded on 9 January, accusing the government of allegedly planning to revise its nuclear objectives so it can speed up the plan's progress. The government's intent to revise its nuclear goals "without any scientific basis" shows that the electricity plan is just a "political bargaining tool that can vary depending on political interests", the KNS said. This threatens the stability of the South Korean electricity market, it added. The ministry did not respond to Argus' request for comment. But the alleged revision may not have been solely driven by political motives. Seoul may have missed the window of opportunity for approving new nuclear capacity in the timescale required, judging by the 14-year timeline for planning and construction. It remains unclear how the government would offset any reduction in its nuclear ambitions, but South Korea's slow grid development may leave little alternative other than boosting gas-fired capacity. Under the current draft electricity plan, gas-fired output would account for a 25.1pc (160.8TWh) share of total generation in 2030 and 11.1pc (78.1TWh) in 2038, up from 22.9pc (142.4TWh) and 9.3pc (62.3TWh), respectively, in the previous plan. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariff war is a lose-lose proposition: Canada

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.

US inflation gains, core prices ease in December

15/01/25

US inflation gains, core prices ease in December

Houston, 15 January (Argus) — 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 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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