Chile scraps power rate hike, boosts subsidies

: Crude oil, Electricity, Metals, Natural gas, Oil products
19/10/23

Chile's center-right government is rolling back an electricity rate increase as part of a package of extraordinary social measures aimed at quelling days of mass demonstrations, looting and infrastructure attacks.

The electricity rate cut creates a "mechanism to stabilize electricity rates, which will allow a recent 9.2pc increase to be revoked, bringing rates back to where they were in the first semester of the year," the government said.

The move was preceded by quiet consultations with large power generators.

Other steps include increased pensions, a guaranteed minimum wage, medicine subsidies and an increase in the highest tax rate to 40pc.

"This social agenda is not going to solve all of the problems that plague Chilean families, but it is big effort," President Sebastian Pinera said in a national address last night. "It is going to require more funds, so we need great efficiency and a reassignment of resources."

University students and grassroots union organizers at the front lines of the protest movement rejected the measures out of hand. "This does not go to the root of the problems of the enormous majority of the population," one union organizer told Argus.

"This means more money for the rich," a student leader said.

The protesters, many of whom were born after Chile restored democracy in 1990, are demanding that the government immediately repeal a state of emergency and pull back the military that was deployed to the streets of Santiago and other cities over the weekend to try to restore order. Some want Pinera to resign to make way for a constituent assembly.

One energy industry executive who did not want to be identified lamented that the measures would not be enough to appease the protesters and restore Chile's reputation as a safe bet for investors. "We don't know where this is heading," the executive said. "I hope the measures announced by Pinera help in some way, but I don't think they will. Even the most aggressive measures don't go to the root of the problem — there is a visceral reaction against the government."

Offices in Santiago's main business district are open but close early to allow people to return home before evening curfews set in. Most small businesses and many schools remain closed.

There was more looting overnight in several cities, but two more lines of the Santiago Metro were partially restored after most of the system was torched by protesters late last week. Local communities have launched clean-up campaigns.

The uprising broke out after the government announced a metro fare hike that it was later forced to suspend.

Chile has been known for decades as Latin America's most stable democracy and advanced economy. The copper industry that is the main revenue earner was dealt a blow yesterday with the launch of a strike at the giant Escondida copper mine. State-owned Codelco says it is operating normally with some shift adjustments.

A general strike sought by protesters starting today has not come to pass.

Chile imports crude and refined products to supplement production from two refineries run by state-owned Enap, which has said its operations have not been affected by the unrest. The country also imports LNG for power generation and industry.

The country has ample fuel supply, but distribution has been hampered by the unrest, vandalized stations and panic buying.

Since late last week, more than 5,000 people have been detained, and at least 15 people have died, mostly in fires related to looting, according to the attorney general's office. Human rights groups are denouncing violations by the police and the military.

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25/04/14

GM stopping, slowing Ontario EV van production

Houston, 14 April (Argus) — US automaker General Motors will stop and then reduce production of its BrightDrop electric delivery van at the Ingersoll, Ontario, assembly plant, initiating layoffs of nearly 500 workers, according to Canada's private sector union Unifor. GM will begin temporary layoffs on 14 April, with workers returning in May for limited production. After that, operations will be idled until October 2025, Unifor said. When production resumes, the plant will operate on a single shift for the foreseeable future — a reduction that will lead to the indefinite layoff of nearly 500 workers. During the downtime, GM plans to complete retooling work to prepare the facility for production of its 2026 model-year commercial electric vehicles. GM sold 274 BrightDrop vans in the first quarter, up 7pc from a year earlier. While GM remains committed to the Ortario facility with planned 2026 upgrades, its future is uncertain without stronger domestic support and fair market access, according to Unifor. "The reality is the US is creating industry turmoil," said Unifor National President Lana Payne, referring to sweeping global US tariffs. "Trump's short-sighted tariffs and rejection of electric vehicle technology is disrupting investment and freezing future order projections." By Carol Luk Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IMO GHG pricing not yet Paris deal-aligned: EU

25/04/14

IMO GHG pricing not yet Paris deal-aligned: EU

Brussels, 14 April (Argus) — The International Maritime Organisation's (IMO) global greenhouse gas (GHG) pricing mechanism "does not yet ensure the sector's full contribution to achieving the Paris Agreement goals", the European Commission has said. "Does it have everything for everybody? For sure, it doesn't," said Anna-Kaisa Itkonen, the commission's climate and energy spokesperson said. "This is often the case as an outcome from international negotiations, that not everybody gets the most optimal outcome." The IMO agreement reached last week will need to be confirmed by the organisation in October, the EU noted, even if it is a "strong foundation" and "meaningful step" towards net zero GHG emissions in global shipping by 2050. The commission will have 18 months following the IMO mechanism's formal approval to review the directive governing the bloc's emissions trading system (ETS), which currently includes maritime emissions for intra-EU voyages and those entering or leaving the bloc. By EU law, the commission will also have to report on possible "articulation or alignment" of the bloc's FuelEU Maritime regulation with the IMO, including the need to "avoid duplicating regulation of GHG emissions from maritime transport" at EU and international levels. That report should be presented, "without delay", following formal adoption of an IMO global GHG fuel standard or global GHG intensity limit. Finland's head representative at the IMO delegation talks, Anita Irmeli, told Argus that the EU's consideration of whether the approved Marpol amendments are ambitious enough won't be until "well after October". Commenting on the IMO agreement, the European Biodiesel Board (EBB) pointed to the "neutral" approach to feedstocks, including first generation biofuels. "The EBB welcomes this agreement, where all feedstocks and pathways have a role to play," EBB secretary general Xavier Noyon said. Faig Abbasov, shipping director at non-governmental organisation Transport and Environment, called for better incentives for green hydrogen. "The IMO deal creates a momentum for alternative marine fuels. But unfortunately it is the forest-destroying first generation biofuels that will get the biggest push for the next decade," he said. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Shale patch on edge after tariff drama

25/04/14

Shale patch on edge after tariff drama

New York, 14 April (Argus) — US president Donald Trump's back and forth over tariffs that sent oil prices tumbling to a four-year low last week has sparked jitters across the shale patch, although most producers are likely to take their time to respond. The oil and gas industry, one of Trump's biggest cheerleaders and donors during his election campaign, has been taken aback by the speed and scale of the president's escalating trade wars and executives are signalling growing impatience. Meanwhile, Trump's "Drill, baby, drill" mantra is even less likely to become a reality now, after oil slid below the $65/bl level that executives surveyed by the Dallas Federal Reserve Bank last month warned was needed to profitably sink a new well. Trump's imposition of punitive tariffs on nearly every major US trading partner led to a sell-off in stock, bonds and commodity markets until he announced a 90-day pause for most nations — except China — on 9 April. While it may be too early for talk about dropping rigs and curtailing production, companies will face tough questions from analysts about their contingency plans when first-quarter results start coming through later this month. One key difference from previous downturns in 2014 and 2020 is that exploration and production (E&P) firms are in a better position this time, with less debt on their balance sheets and more modest growth plans, which may help limit the initial fallout. But higher costs owing to tariffs on steel imports could offset the efficiency savings that have kept production going in an era of restrained spending. "E&Ps are likely to mostly take a wait-and-see approach — with a high level of uncertainty about future policy — and not prematurely lay down rigs," consultancy Enverus principal analyst Andrew Dittmar says. "If prices are weak headed into 2026, that is where you are likely to see a more material reduction in drilling budgets. Feeling dominated The shale industry has welcomed Trump's "energy dominance" agenda and his promise of a permitting overhaul. But cracks are appearing in that relationship because of his stop-start policy on tariffs. "This administration better have a plan," Diamondback Energy president Kaes Van't Hof said in a social media post, in a direct appeal to energy secretary Chris Wright. Shale is the "only industry that actually built itself in the US, manufactures in the US, grew jobs in the US and improved the trade deficit — and by proxy GDP — in the US over the past decade", Van't Hof, who is due to become Diamondback chief executive later this year, said. His company became the largest pure-play producer in the prolific Permian basin of west Texas and southeast New Mexico following its $26bn takeover of Endeavor Energy Resources last year. While few public producers were planning any kind of meaningful growth this year as higher dividends and buy-backs continue to be the priority, even that could eventually find itself on the chopping block. "The corporate reality for public players means that already modest growth could be at risk if prices remain near $60/bl," Rystad Energy vice-president for North American oil and gas Matthew Bernstein says. Little in the way of growth was forecast outside the core Permian this year even before Trump rolled out his tariffs. A prolonged period of lower prices could spur a downturn in the top-performing US basin. A combination of short-term activity levels, investor distributions and production could be sacrificed in order to defend margins, according to Rystad. And producers in the Delaware sub-basin could be especially vulnerable, given the region's steep initial decline rates, high well costs and large capital return requirements, the consultancy says. By Stephen Cunningham WTI breakeven price Nymex WTI futures month 1 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec cuts oil demand forecasts on tariffs impact

25/04/14

Opec cuts oil demand forecasts on tariffs impact

London, 14 April (Argus) — Opec has cut its oil demand growth forecasts by 150,000 b/d for this year and 2026, citing US trade tariffs. In its latest Monthly Oil Market Report (MOMR), published today, Opec revised down its 2025 oil consumption growth projection to 1.3mn b/d, from 1.45mn b/d in its previous report. It said this was because of received data in the first three months of the year and "announced US tariffs." For 2026, the producer group now sees oil use growing by 1.28mn b/d, compared with 1.43mn b/d previously. It now sees demand at 105.05mn b/d in 2025, and at 106.33mn b/d in 2026. The outlook for oil demand and prices have sharply deteriorated since US President Donald Trump's 'Liberation Day' tariff announcements and the Opec+ alliance's decision to speed up planned output hikes, both decisions taken in early April. But Opec's oil demand revisions are relatively modest compared with those by some investment banks in recent weeks. Goldman Sachs slashed its oil demand forecast for this year to just 300,000 b/d. Morgan Stanley sees demand growth at 500,000 b/d in the second half of this year, half of its prior estimate. In terms of supply, Opec cut its non-Opec+ liquids growth forecast by 100,000 b/d for 2025 and for 2026, to 910,000 b/d and 900,000 b/d respectively. The US was the main driver for downward revision in both years: Opec now sees the country adding 400,000 b/d in 2025 and 380,000 b/d in 2026, compared with 450,000 b/d and 460,000 b/d previously. Opec+ crude production — including Mexico — fell by 37,000 b/d to 41.02mn b/d in March, according to an average of secondary sources that includes Argus . Opec puts the call on Opec+ crude at 42.6mn b/d in 2025 and 42.8mn b/d in 2026. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Semiconductors alter minor metal demand/supply balances

25/04/14

Semiconductors alter minor metal demand/supply balances

London, 14 April (Argus) — Evolving semiconductor technologies and growing chip consumption across a range of applications are changing demand and supply dynamics in several minor metal markets, delegates heard at the Minor Metals Trade Association's annual conference in Lisbon last week. In the hafnium market, demand from the semiconductor industry could surpass that of super-alloys for the largest share of demand in the next five years, metal and alloy producer Nanoscale Powders president Andrew Matheson said. Semiconductor demand for hafnium could climb to 64 t/yr by 2030, up by 24pc from 40 t/yr in 2024, outpacing 5pc growth in nickel super-alloy demand to 60 t/yr from 45 t/yr. This would also outpace 3pc growth in critical nuclear uses to 18 t/yr. It is unclear whether there is sufficient room to expand hafnium supply to meet the projected demand growth, Matheson said. Global production totalled about 138t in 2024, well below estimated nameplate capacity of 245t. 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Total gallium production capacity has more than tripled since 2016 from about 300 t/yr to more than 1,100 t/yr, driven by expansion in China, according to Jan Giese, senior manager for minor metals and rare earths at German trading firm Tradium. Gallium exports from China have steadily decreased since 2018, dropping further in 2023 when the Chinese government introduced export controls. This has resulted in a contraction of the share of exports in Chinese production to just 7pc in 2024 from 52pc in 2018. China is no longer dependent on exports of gallium metal, as the capacity expansion is required to support China's drive towards full downstream integration into the semiconductor value chain, Giese said. Gallium is used as a dopant in silicon-based semiconductors, as well as in compound semiconductor materials, in the form of gallium arsenide (GaAs) and gallium nitride (GaN). GaAs is critical in high-frequency devices and LEDs, while GaN is used in high-power, high-frequency devices and LEDs. Adoption of GaN is growing in new AI and automotive applications, with Chinese device manufacturers and automakers leading the way in bringing GaN-on-silicon devices into automotive power electronics. China previously imported semiconductors to supply its electronics industry. But US restrictions on exports of advanced semiconductors and manufacturing equipment to China since 2022, supported by the Netherlands and Japan, have prompted China to rapidly establish its own domestic semiconductor production and advance its technological development. The state-backed National Integrated Circuit Industry Investment Fund closed a third round last year of 344bn yuan ($47.5bn), more than double the value of the previous two rounds combined, in addition to growing private-sector investment. The scale of Chinese investment in expanding semiconductor manufacturing is absorbing much of the expansion in gallium capacity and supporting the long-term competitiveness of the Chinese downstream sector, Giese said. But as US tariffs have reduced dependency on imports of Chinese gallium, along with the export controls, they have reduced the competitiveness of the US downstream sector. Some customers have relocated, cutting US gallium demand and in turn failing to spur new primary gallium production. By Nicole Willing Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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