Funding cuts could delay US river lock work: Correction

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14/04/25

Corrects lock locations in paragraph 5.

The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year.

Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending.

No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget.

River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennessee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed.

There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock on the Illinois River; Lock 25 on the Mississippi River; and the Montgomery Lock on the Ohio River.

There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map).

By Meghan Yoyotte

Corps active construction projects 2025

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21/04/25

IMO incentive to shape bio-bunker choices: Correction

Corrects B30 pricing in paragraph 5. New York, 21 April (Argus) — An International Maritime Organization (IMO) proposal for ship owners who exceed emissions reduction targets to earn surplus credits will play a key role in biofuel bunkering options going forward. The price of these credits will help determine whether B30 or B100 becomes the preferred bio-bunker fuel for vessels not powered by LNG or methanol. It will also influence whether biofuel adoption is accelerated or delayed beyond 2032. At the conclusion of its meeting earlier this month the IMO proposed a dual-incentive mechanism to curb marine GHG emissions starting in 2028. The system combines penalties for non-compliance with financial incentives for over-compliance, aiming to shift ship owner behavior through both "stick" and "carrot" measures. As the "carrot", ship owners whose emissions fall below the IMO's stricter compliance target will receive surplus credits, which can be traded on the open market. The "stick" will introduce a two-tier penalty system. If emissions fall between the base and direct GHG emissions tiers, vessel operators will pay a fixed penalty of $100/t CO2-equivalent. Ship owners whose emissions exceed the looser, tier 2, base target will incur a penalty of $380/t CO2e. Both tiers tighten annually through 2035. The overcompliance credits will be traded on the open market. It is unlikely that they will exceed the cost of the tier 2 penalty of $380/t CO2e. Argus modeled two surplus credit price scenarios — $70/t and $250/t CO2e — to assess their impact on bunker fuel economics. Assessments from 10-17 April showed Singapore very low-sulphur fuel oil (VLSFO) at $481/t, Singapore B30 at $740/t, and Chinese used cooking oil methyl ester (Ucome), or B100, at $1,143/t (see charts). If the outright prices remain flat, in both scenarios, VLSFO would incur tier 1 and tier 2 penalties, raising its effective cost to around $563/t in 2028. B30 in both scenarios would receive credits putting its price at $653/t and $715/t respectively. In the high surplus credit scenario, B100 would earn roughly $580/t in credits, bringing its net cost to about $563/t, on par with VLSFO, and more competitive than B30. In the low surplus credit scenario, B100 would earn just $162/t in credits, lowering its cost to approximately $980/t, well above VLSFO. At these spot prices, and $250/t CO2e surplus credit, B100 would remain the cheapest fuel option through 2035. At $70/t CO2e surplus credit, B30 becomes cost-competitive with VLSFO only after 2032. Ultimately, the market value of IMO over-compliance credits will be a major factor in determining the timing and extent of global biofuel adoption in the marine sector. By Stefka Wechsler Scenario 1, $70/t surplus credit $/t Scenario 2, $250/t surplus credit $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Calif. refinery resupply rule vote postponed

21/04/25

Calif. refinery resupply rule vote postponed

Houston, 21 April (Argus) — California regulators delayed a vote this week on new refinery resupply rules meant to mitigate retail gasoline price spikes, but refiners are still wary that the state is moving to make the most regulated market in the US even tougher. The California Energy Commission (CEC) had scheduled a vote on refinery resupply rules at its 24 April business meeting but said the meeting is now postponed to allow for additional feedback and consultation with stakeholders. The draft rules under consideration would require refiners to submit resupply plans to the state at least 120 days before any planned maintenance in September and October that would cause California specification gasoline production to decline by 20,000 b/d for at least 21 days or a total of more than 450,000 bl. Large spikes in California prices occurred in the fall of 2022 and 2023. The commission is also planning rulemaking this year on minimum inventory requirements to avoid price spikes in the event of unplanned events, as well as possible rules on setting a refiner margin cap. The timing of the new regulations is precarious, as two major refineries in the state are planning to shut operations within a year. Independent refiner Valero said on 16 April it is planning to shut or re-purpose its 145,000 b/d refinery in Benicia, California and continues to evaluate strategic alternatives for its other refinery in the state – the 85,000 b/d Wilmington facility. In addition, Phillips 66 is planning to shut its 139,000 b/d Los Angeles refinery later this year. Effort to stop gasoline price spikes The California rules stem from two pieces of legislation signed by California governor Gavin Newsom known as AB X2-1 and SB X1-2, part of a multi-year effort to mitigate price volatility in the state, after some of the highest gasoline prices ever recorded in the fall of 2022. US refiners have long opposed the new regulations seeing them as a political attack on the industry, conflicting with other laws and the latest example of an increasingly difficult regulatory environment in the state. The CEC has conducted workshops to help draft the rules with the participation of labor groups, the refining industry, environmental justice groups, community advocates, and the public. The industry was largely represented by the Western States Petroleum Association (WSPA). WSPA told the commission that the resupply rule could conflict with existing statutory requirements for refiners not to withhold fuel from the market and could result in market distortions and undesirable price impacts. The rules could also make it hard for Arizona and Nevada to secure needed supplies in the face of regulations expressly favoring Californians' access to fuel, WSPA said. The rules could also force refiners to use "uneconomic strategies" to secure non-spot market resupplies and additional capital to guarantee inventories that could potentially lead to higher gasoline prices, the group said. AB X2-1 forbids the CEC from adopting any regulation "unless it finds that the likely benefits to consumers from avoiding price volatility outweigh the potential costs to consumers." WSPA said it is concerned that the CEC does not "have the facts in front of it to legitimately support such a finding" with respect to imposing the resupply requirement. Under the draft resupply rules, refiners must show they can secure sufficient supply to ensure that lost gasoline production anticipated during the maintenance does not adversely affect the California transportation fuels market. The plan must show a resupply volume of at least 85pc of the anticipated lost gasoline production during the maintenance and the resupply volumes must match the seasonal specification of the lost production. The resupply plans could include imports and each barrel of resupply obtained by imports will count as 1.3 barrels of resupply. In addition, a plan that includes resupply through the purchase or storage of gasoline blendstocks or gasoline blending components must explain how such materials will result in an equivalent amount of California specification gasoline. Non-compliance could carry a civil penalty of $100,000-$1mn per day. Refineries with capacity under 30,000 b/d are exempt from the resupply regulation. The rules would apply to five major refiners operating in the state — Chevron, PBF Energy, Phillips 66, Valero and Marathon. Phillips 66, however, will be closing its Los Angeles refinery by October and converted a refinery in Rodeo, California, to renewable fuels in 2024. Since the 1980s, 29 refineries in California have been shut or integrated with other refineries that eventually closed or converted to renewable fuels production, according to CEC data. About half of the shut refineries were smaller operations, producing less than 20,000 b/d. Looking at options The CEC caused a stir in August 2024 when it released its Transportation Fuels Assessment, which examined policy options to mitigate price spikes and transition away from fossil fuels including the state of California buying and owning refineries. The assessment said this could range from one refinery to all refineries in the state. But the document also highlighted problems with such a plan, including the high cost of buying refineries, significant legal issues, and the fact that the state has no experience managing complex industrial processes. California is not currently pursuing this option, state officials said. Another idea in the Transportation Fuels Assessment involved state-owned product reserves in the north and south of California to allow rapid deployment of fuel when needed. This could include "up to several hundred thousand barrels." The CEC and the California Air Resources Board are drafting a formal Transportation Fuels Transition Plan which will serve as a road map to move away from fossil fuels. A draft of the report will be released later this year. The Transportation Fuels Assessment and the Transportation Fuels Transition Plan were mandated under SB X1-2. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Caustic soda cargoes largely exempt from US port fees

21/04/25

Caustic soda cargoes largely exempt from US port fees

Houston, 21 April (Argus) — US caustic soda importers are expected to be able to circumvent new fees on Chinese built or owned vessels scheduled to be imposed this fall. Offshore caustic soda imports to the US are primarily shipped on vessels that fall within the list of exemptions provided by the US Trade Representative last week, including those with capacities less than or equal to 55,000 deadweight tonnes (dwt) and specialized vessels for liquid chemical transportation. The US is a net exporter of caustic soda, with only 3-5pc of total domestic supply supplemented by imports, according to census bureau data collected by Global Trade Tracker (GTT) and the latest estimates from Argus Chlor-Alkali Analytics . East Asia exporters are critical suppliers to west coast consumers, but domestic importers anticipate most vessels carrying caustic soda to the west coast to be exempt from fees based on ship sizes less than 55,000dwt. US caustic soda importers have faced several new regulations and policies this year increasing the cost of business, with established trade lanes facing reshaping. President Donald Trump's baseline 10pc tariff on most trade partners is expected to strengthen demand for US Gulf coast-produced caustic soda, especially from east coast importers vying to source less from EU producers. West coast distributors, though, are expected to continue importing from East Asia suppliers and pass along tariff-related expenses to end users. Additionally, west coast importers earlier this year imposed a $15/dry short ton (dst) line-item charge to customers following the rollout of The California Air Resources Board (CARB) emissions control requirements for tanker vessels at the ports of Los Angeles and Long Beach. The newly-enforced regulation requires shippers to limit in-berth greenhouse gas emissions by connecting to shore power or utilizing a CARB Approved Emission Control Strategy (CAECS). By Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India’s thermal coal imports ease in March

21/04/25

India’s thermal coal imports ease in March

Singapore, 21 April (Argus) — India's thermal coal imports in March fell on the year for the seventh consecutive month, pressured by rising domestic output and high inventories even as coal-fired generation expanded. The country imported 14.1mn t of thermal coal in March, down by 1.2pc from a year earlier, but up by over 24pc from 11.33mn t in February, according to data from shipbroker Interocean. Coal arrivals declined year-on-year across key origins barring Indonesia and South Africa. India's cumulative imports over January-March stood at 38.3mn t, down by 8.6pc from 41.9mn t in the same period a year earlier, according to Interocean data. Demand for imported coal fell as domestic availability continued to rise. The combined output from state-controlled Coal India (CIL), Singareni Collieries (SCCL) and captive blocks reached 118.54mn t in March, up by 1.6pc from a year earlier, according to data from the country's coal ministry. Overall supplies stood at 94.94mn t, up by 5.1pc from a year earlier. Combined coal supplies to utilities from domestic sources stood at 78.46mn t in March, up by 6.3pc from a year earlier and up from 69.61mn t in February, coal ministry data show. The increase in domestic coal output and supplies helped utilities to increase stocks to cater for an increase in coal consumption at power plants in March. But the higher domestic coal availability pressured imports. The country's coal-fired generation reached 117.95TWh in March, up from 112.82TWh a year earlier and well above the 106.18TWh in February, according to Central Electricity Authority (CEA) data. Higher temperatures and increased air conditioning use lifted coal-fired output in March. Coal burn at utilities could remain elevated over the summer months and exacerbate drawdowns from stocks at power plants and at coal producer CIL. Combined coal inventories at Indian power plants stood at 58.11mn t as of 31 March, up from 50.69mn t a year earlier, and up from 54.59mn t on 28 February, the CEA said. Inventories at CIL reached an all-time high of 106.8mn t as of 31 March, up from 89.41mn t a year earlier. Import mix Imports from Indonesia grew to 9.68mn t in March from 9.23mn t a year earlier, and were sharply higher from 6.75mn t in February, Interocean data show. Indonesia continued to be the primary supplier of imported coal to India in March, accounting for nearly 69pc of overall thermal coal imports, up from almost 60pc in February. Imports from South Africa, a source favoured by coal-consuming industries like sponge iron, rose by 72pc from a year earlier to 2.32mn t, but fell from 2.42mn t in February. Demand from India's coal-intensive sponge iron industry, which is a major consumer of South African NAR 5,500 kcal/kg coal, remained resilient following a stimulus measure from the Indian government to introduce steel safeguards , which in turn has driven domestic sponge iron prices higher. By Ajay Modi India thermal coal imports in March 2025 t Origin Quantity % ± m-o-m % ± y-o-y Indonesia 9,684,944 43.4 5 South Africa 2,323,265 -4 72.1 USA 1,132,417 66.8 -17.1 Russia 435,120 -27.1 -20.8 Mozambique 68,306 -42.7 -85.7 Others 458,288 -21.4 -44.1 Total 14,102,340 24.4 -1.2 Source: Interocean Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Alcoa expects to incur $90mn 2Q hit from tariffs

21/04/25

Alcoa expects to incur $90mn 2Q hit from tariffs

Houston, 21 April (Argus) — US-based integrated aluminum producer Alcoa anticipates $90mn in tariff-related costs associated with importing primary aluminum from Canada during the second quarter. For the full year, the Pennsylvania-based company foresees that figure rising to between $400mn-425mn, as 70pc of its production from Canada "is destined for US customers," Alcoa chief executive William Oplinger said in a first-quarter earnings call late Wednesday. A higher Midwest premium should help offset most of those cost pressures in support of Alcoa's domestic smelters, but Oplinger warned that the company still faces a $100mn negative impact on its business in 2025 because of the higher Section 232 duties that US president Donald Trump implemented on 12 March. The company noted that the US lacks the infrastructure to cover domestic aluminum consumption, even if all other idled smelting capacity here would restart. "Until additional smelting capacity is built in the US, the most efficient aluminum supply chain is Canadian aluminum going into the US," Oplinger said. By his estimate, at least five domestic smelters would need to be added, but construction would take "many years" and investment would be partially dependent on access to new — and cheap — energy sources. "These new smelters would require additional energy production equivalent to almost seven new nuclear reactors or more than 10 Hoover dams," Oplinger said. Still, Alcoa maintained its full-year production and sales volume guidance for aluminum products, ranging between 2.3mn-2.5mn metric tonnes (t) and 2.6mn-2.8mn t, respectively. It also kept its outlook for alumina output and shipments unchanged at 9.5mn-9.7mn t and 13.1mn-13.3mn t, respectively. First-quarter aluminum production increased by 4pc to 564,000t from the prior-year period, while total sales volumes fell by 3.9pc in the same timeframe, reflecting timing of shipments and the end of its offtake agreement with Saudi Arabia Mining (Ma'aden) as part of its planned divestment from the entities' aluminum joint venture. Alumina output in January-March dropped by 12pc to 2.4mn t on the year, while shipments fell by 12pc as well, to 2.1mn t. Alcoa attributed the drop in sales volumes to timing of shipments and reduced trading. Quarterly bauxite production fell by 5.9pc to 9.5mn dry metric tonnes (dmt) from the prior-year period, while sales volumes increased by 67pc to 3mn dmt. The company was able to capitalize on supply tightness in the bauxite market that has helped elevate prices to $80-85/dmt, selling cargoes in the spot market. Alcoa posted a $548mn profit in the first quarter compared to a loss of $252mn in the prior-year period. Revenues increased by 30pc to nearly $3.4bn in the same timeframe. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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