Keystone XL pipeline steel may be sold off
TC Energy is assessing options on its stalled 830,000 b/d Keystone XL crude pipeline, including selling the steel purchased for the project after President Joe Biden rescinded a key cross-border permit last month.
The company has not officially cancelled Keystone XL but has suspended the project while it assesses options with partners and stakeholders, including the government of Alberta, Canada, which invested $1.1bn in the pipeline last year.
The Keystone XL project team is evaluating what it can do with all of its equipment, including steel purchased for the line, the company said today while reporting fourth quarter earnings. Some of the steel has increased in value and there is a market for some of the spare materials if it gets to that point, TC Energy said.
The company expects to record "a substantive, predominantly non-cash, after-tax charge" to its earnings in the first quarter of 2021 related to Keystone XL. The amount of the impairment will depend on various issues, including "outstanding contractual commitments, the estimated net recoverable value of tangible plant and equipment and specified contractual recoveries."
TC Energy earlier this month cancelled an open season for its existing 590,000 b/d Keystone crude pipeline system which was contingent on Keystone XL going into service.
The $8bn Keystone XL pipeline began some construction activities in the US last year and was not expected to be placed into service until 2023. A border crossing segment was completed in May 2020.
TC Energy proposed the project more than a decade ago to offer another option to move western Canadian crude to the US. The line would move crude from Hardisty, Alberta, to Steele City, Nebraska, where it would connect with other TC Energy pipelines to Cushing, Oklahoma, and the southeast Texas coast.
The project was first proposed in 2008, but it has been delayed repeatedly. Former US president Barack Obama in 2015 blocked Keystone XL after years of review, citing environmental concerns. The project was revived in 2017, with a cross-border permit from the administration of former president Donald Trump.
The project was delayed again last year when a US district court vacated a key water permit. That case is pending but may be moot if TC Energy cancels the project.
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Blast furnace works cut S Korea's Posco 2Q steel output
Blast furnace works cut S Korea's Posco 2Q steel output
Singapore, 26 July (Argus) — South Korean steelmaker Posco reported lower crude steel output and sales in the second quarter because of refurbishments at its Pohang blast burnace, but a higher operating profit. Posco's crude steel production dropped to 8mn t over April-June, from 8.66mn t in the first quarter and 8.85mn t a year earlier, the company said in an earnings call on 25 July. Sales volume also dipped to 7.86mn t, from 8.23mn t in the previous quarter and 8.48mn t a year earlier. The firm's utilisation rates fell to 79.1pc in the second quarter, from 85.6pc in the first quarter and 87.3pc a year earlier. Posco began maintenance and modernisation of its No.4 blast furnace at Pohang in late April, which has a capacity of around 5.3mn t/yr. But production resumed at the end of June, raising its scrap consumption as reflected in its resumption of regular weekly purchases of Japanese scrap after a three-month halt. The group's combined steel revenue, including Posco and overseas steel facilities, stood at 15.4 trillion won ($11.1bn) in the second quarter. This was largely steady from the previous quarter but down from W16.5 trillion a year earlier. Combined steel operating profit stood at W497bn in the second quarter, up from W339bn in the first quarter, but less than half of W1 trillion a year earlier. Posco reported higher mill margins as the cost of raw materials dropped and sales price increased. But overseas upstream operations reported losses given an influx of cheap imports into the southeast Asian market and lower sales prices. Battery, other expansion plans Revenue from secondary battery unit Posco Future M fell by 20pc on the quarter and 23pc on the year to W915bn. Operating profit stood at W3bn, down from W38bn a quarter earlier and W52bn a year earlier. Posco, while citing a difficult battery materials industry over April-June, said during the earnings call that it is "closely monitoring demand fluctuations." The firm will pace its investment, but it will "not lose out" on any opportunity to invest in essential resources such as lithium whose prices have "hit rock bottom." Posco flagged the approaching US presidential election and shifting strategies of major automakers as factors that will continue affecting the EV supply chain. This was echoed by South Korean battery maker LG Energy Solution , which expects global EV market growth to come in at slightly over 20pc this year, down from 36pc a year earlier. Posco's first domestic lithium hydroxide plant, located at the Yulchon Industrial Complex in Gwangyang, with a capacity of 21,500 t/yr aims to start full operations in February 2025. It will be operated by Posco-Pilbara Lithium Solution, a joint venture between Posco and Australia's lithium miner Pilbara Minerals. The company also expects to finish building a second plant at the same location with similar capacity in September whose full operations will begin in September 2025. Its Argentinian lithium operations will have a total capacity of 50,000 t/yr in the near term, split between phase 1 and phase 2, which will start full operations in April 2025 and June 2026, respectively. Trading firm Posco International also reported that the final stage 4 expansion of its Myanmar offshore gas field will start in July, with about 4mn t/yr of By Tng Yong Li and Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU could launch 'other countries' HRC dumping probe
EU could launch 'other countries' HRC dumping probe
London, 25 July (Argus) — The European Commission soon could initiate a dumping investigation on some exporters selling into the 'other countries' quota for hot-rolled coil (HRC), according to multiple market sources. The 'other countries' quota in recent quarters has consistently filled rapidly upon resetting, and this pressure has been intensified by rising Chinese exports since August of last year. Some key 'other countries' sellers have seen the volumes they take from China balloon as a result. Vietnam bought more than 4.2mn t from China in the first six months of this year, compared with about 6mn t in the whole of 2023. China's increased exports has sparked talk that both India and Vietnam may start anti-dumping duty investigations. When announcing its 15pc cap on countries selling into the 'other countries' quota, the commission specifically alluded to the increase in Chinese exports affecting trade flows. Vietnam, Egypt, Japan and Taiwan are by far the largest sellers into the 'other countries' quota, and all of the countries initially exceeded their 141,849t cap quickly when the new quotas took force on 1 July. In April, before the cap was implemented, these four countries amounted for more than half of the 1.4mn t imported by the EU. The 'other countries' quota has essentially been reduced from 940,000 t/quarter to less than 600,000 t/quarter given the new cap. Sources suggested duties could be applied retroactively if the commission finds that material has been dumped. They also suggested it could be difficult to show dumping in some countries, such as Vietnam and Egypt, where domestic prices are often below export levels. A leading producer was gathering information on Egyptian cargoes arriving at EU ports in recent months, a trading firm said. The commission refused to comment on any potential investigation. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Yemen warring factions reach UN-mediated financial deal
Yemen warring factions reach UN-mediated financial deal
Dubai, 25 July (Argus) — The UAE today welcomed a UN-mediated agreement between Yemen's warring factions that could allay economic woes in the impoverished country. The UAE's ministry of foreign affairs hailed the 23 July announcement of an agreement between the internationally recognised Yemen presidential leadership council (PLC) and the Houthi militant group "with respect to airlines and the banking sector." The UAE, alongside Saudi Arabia, support the PLC. The agreement stipulates "cancelling all the recent decisions and procedures against banks by both sides and refraining in the future from any similar decisions or procedures," and calls for the resumption of Yemenia Airways' flights between Sana'a and Jordan at three a day and operating flights to Cairo and India "daily or as needed." The deal was reached two days after Israeli jets bombed the Houthi-controlled Red Sea port of Hodeidah. The internationally-recognised central bank in Aden in April ordered financial institutions to move their main operations from Houthi-held territory within 60 days or face sanctions. That deadline ran out in June, leading to a ban on dealing with six banks whose headquarters remained in Houthi-held Sana'a. The Houthis retaliated by taking similar measures against banks in PLC-held areas and seized four Yemenia Airways planes at Sana'a airport. The PLC said it hoped the Houthis would also meet a commitment to resume crude exports. Yemen's crude production collapsed soon after the start of the country's civil war, from around 170,000 b/d in 2011-13 to 50,000-60,000 b/d in 2022, according to the BP Statistical Review of World Energy. Data from analytics firm Kpler suggests Yemen has not exported any crude since October 2022. Threats yield results The Iran-backed Houthis earlier in July threatened to attack vital infrastructure such as airports and ports in Saudi Arabia, holding Riyadh responsible for decisions taken by Aden's central bank. The Houthis struck central Tel Aviv on 19 July, inviting an Israeli retaliation that took out a power station that supplies the Red Sea coastal city of Hodeidah and its port and fuel tanks, which are controlled by the Houthis. A breakthrough in the UN-mediated talks between the PLC and the Houthis resulted in the agreement on 22 July, a possible sign that Riyadh might have compromised to avoid a Houthi escalation. The Houthis have been attacking commercial ships in and around the Red Sea since November last year, six weeks after the breakout of the Israel-Hamas war, in what they say is an act of solidarity with Palestinians in Gaza. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China raises EV, ICE vehicles trade-in subsidies
China raises EV, ICE vehicles trade-in subsidies
Beijing, 25 July (Argus) — The Chinese government has raised subsidies to boost trade-in of old internal combustion engine (ICE) vehicles with new energy vehicles (NEV). The subsidy for consumers who trade in an old NEV registered before 30 April 2018 or an ICE vehicle that meets or is below China's national 3 emission standard for a new NEV has doubled to 20,000 yuan from a previous subsidy announced in May . Electric vehicles cost anywhere between Yn50,000 to Yn1mn, with consumers mostly purchasing those in the Yn100,000-200,000 range, according to industry participants. The government is also offering a Yn15,000 subsidy for consumers who trade in an old NEV registered before 30 April 2018 or an ICE vehicle that meets or is below China's national 3 emission standard, and purchase a new ICE vehicle with the displacement below 2.0 litre. Beijing in early March announced a plan to promote the replacement of industrial equipment and consumer goods through large-scale trade-ins, with NEVs making up the main part of the scheme, as part of Beijing's efforts to meet its annual economic growth target of 5pc. China's ministry of finance announced on 3 June that it will allocate Yn6.44bn to local governments to pay the subsidies for vehicle trade-ins in 2024, including Yn107mn to Tianjin, Yn90.81mn to Shanghai, Yn74.61mn to Beijing and Yn66.49mn to Chongqing. The central government announced on 29 May that it will remove purchase restrictions for NEVs during 2024-25, with the capital city Beijing allocating 20,000 additional purchase quotas for NEVs to families without a car. China produced 1.003mn NEVs in June, up by 28pc from the previous year and by 6.7pc from May, with sales increasing by 30pc from a year earlier and by 9.8pc from the previous month to 1.049mn, partly driven by the country's supportive measures, especially the trade-in subsidies. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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