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Mexico builds aqueduct for dry industrial hub

  • : Crude oil, Fertilizers, Oil products, Petrochemicals
  • 22/09/06

Mexico has started building a new federally supported aqueduct aimed at easing a severe drought and water restrictions in industry-heavy Nuevo Leon state.

Federal and state officials announced 2 September that crews began working on new Ps10.4bn ($520mn) aqueduct that will connect Nuevo Leon's El Cuchillo reservoir with the Monterrey metropolitan area. The area is an auto manufacturing hub and fuel import thoroughfare.

The 100km (62-mile) aqueduct initiating in the city of China is expected to be ready by July 2023, according to interior secretary Adan Augusto Lopez.

The new aqueduct backed by President Andres Manuel Lopez Obrador comes as the state's reservoirs have hit historically low levels because of an unprecedented drought.

Earlier this summer, Nuevo Leon's Cerro Prieto reservoir fell to just 1pc of its capacity while its La Boca reservoir outside Monterrey fell to 8pc. El Cuchillo fell to around 30pc.

These extremely low levels led the Monterrey metropolitan area, home to some 5mn people, to cut off water service for most hours of the day or for several days at a time.

Residents have protested and long lines for water have regularly formed at convenience stores, while government-owned water trucks have been attacked by angry residents.

Reservoirs like La Boca were largely reduced to fields of dirt and rocks.

The problem is not unique to Nuevo Leon. More than half of the country's municipalities experienced water shortages in July, with eight of 32 states suffering from drought.

In response, Lopez Obrador has declared the water shortages a matter of national security and lashed out at major beverage manufacturing companies, saying he would ban any increases on beer production in the Nuevo Leon area.

Local industrial chamber Caintra responded that a program created by manufacturing companies to donate water had given around 25mn cf to neighborhoods, schools and for other general use.

The chamber also pointed out that beer makers use less than 1pc of Nuevo Leon's water, and that prohibiting production increases would harm job growth and the economy.

Industrial companies overall use around 4pc of water in the state, 93pc of which comes from permitted wells and only 7pc from city water, according to Caintra. Agriculture, on the other hand, uses 71pc of the state's water, with residential consumption taking up 25pc, Caintra said.

Nuevo Leon is home to Cuauhtemoc Moctezuma Brewery, a subsidiary of Heineken, which produces popular Mexican beer brands including Dos Equis and Tecate. Monterrey is also home to Mexico's soft drink bottling giants Femsa and Arca Continental, which bottle Coca-Cola.

The new El Cuchillo aqueduct is expected to transport 5,000 liters/second of water, which would double the amount of water the state can transport from the reservoir.

The federal government is also looking at the possibility of building another aqueduct that would bring water to Nuevo Leon from the Panuco River in Veracruz state.

Still, critics have said the new infrastructure may not help solve Monterrey's water problems in the short term because the state will soon have to take its El Cuchillo aqueduct offline for maintenance. The aqueduct also moves 5,000 liters/second of water from the reservoir.

Nuevo Leon has received a reprieve over the past couple weeks as thunderstorms dropped significant amounts of water and even led to flash floods, causing some casualties.

Regional officials said 3 September that La Boca had received around 75 millimeters of new rainfall over two days, around one-fifth the amount it got during Hurricane Hanna in 2020. La Boca rose to nearly 30pc of its capacity by 5 September, but the Cerro Prieto reservoir remained at 1pc.


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25/04/02

Mexico manufacturing extends contraction in March

Mexico manufacturing extends contraction in March

Mexico City, 2 April (Argus) — Mexico's manufacturing sector contracted for a 12th consecutive month in March, with production and employment both deepening their slides, according to a survey released today. The manufacturing purchasing managers' index (PMI) ticked up to 47.2 in March from 47.1 in February, but remained below the 50-point threshold between contraction and expansion, according to the latest PMI survey from the finance executive association IMEF. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index rose by 1.3 points to 45.3, still deep in contraction. Meanwhile, production fell by 0.6 points to 44.6. The employment index also declined 0.6 points to 46.4 in March, now in contraction for 14 consecutive months. Meanwhile, the non-manufacturing PMI — covering services and commerce — declined 0.8 points to 48.8 in March from 49.6 in February, holding in contraction for a fourth consecutive month. Within the non-manufacturing PMI, new orders fell 1.5 points to 48.2 and production declined 1 point to 47.5 with employment down a point as well in March to 47.5, as all three pushed deeper into contraction. In contrast, the inventories component rose 3.5 points to 50.6 into expansion territory in March. But this may be the result of company strategies to stockpile inventories ahead of US tariffs and the reciprocal measures Mexico is set to announce on 3 April, IMEF technical advisory board member Sergio Luna said. PMI data show that the economic stagnation that began in late 2024 persisted through March, with results from January and February pointing to a sharp slowdown in the first quarter, IMEF said. This follows annualized GDP growth of 0.5pc in the fourth quarter of 2024, slowing from 1.7pc in the third quarter, according to national statistics agency data. Luna said concerns over US tariffs continue to drive much of the uncertainty reflected in the PMI data. Internal factors — such as reduced government spending to contain the fiscal deficit and investor unease over judicial reforms passed last year — are also weighing on activity, Luna added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Sulacid demand from Indonesian buyer muted: Correction


25/04/02
25/04/02

Sulacid demand from Indonesian buyer muted: Correction

Corrects volume in paragraph 5 to 106,000t from 160,000t London, 2 April (Argus) — Sulphuric acid demand from Indonesian battery metals producer PT QMB New Energy Materials (QMB) slowed in March and into April, with the firm carrying out plant maintenance following a landslide. Morowali Industrial Park in central Sulawesi was hit by a landslide after heavy rain on 22 March, resulting in three fatalities. QMB's high-pressure acid leaching plants are likely to be off line for a minimum of three weeks. The company was approached for comment. A large vessel line-up at Bahodopi has also curbed demand from one of Indonesia's largest acid importers. There are currently six vessels waiting to discharge at Bahodopi, carrying a combined 106,000t of acid. Some have been waiting since early March. It is unclear when the congestion will ease, given the QMB outage. Some traders are looking at diverting cargoes to destinations including India's east coast or Chile. QMB's Bahodopi sulphuric acid receipts were disrupted earlier this year after the company exhausted its import quota — this was only renewed in mid-February, for up to 600,000 t/yr. Indonesian sulphuric acid imports totalled 1.08mn t in 2024, slightly down from 2023's record 1.09mn t, with QMB receiving much of this. By Lili Minton and Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India's IOC cuts jet fuel prices by 6pc for April


25/04/02
25/04/02

India's IOC cuts jet fuel prices by 6pc for April

Mumbai, 2 April (Argus) — Indian state-controlled refiner IOC has reduced jet fuel prices by 6pc effective from 1 April. IOC cut prices in Mumbai, capital New Delhi, Kolkata and Chennai by 6pc from a month earlier. Prices vary from state to state depending on local taxes. Asian jet fuel margins — or Singapore jet fuel swaps against Dubai crude values — averaged $13.04/bl in March, down from $15.23/bl in February. India's jet fuel consumption stood at 203,100 b/d in March, up by 5pc on the year, provisional data from the oil ministry show. By Roshni Devi Jet fuel prices in India Rupees/kl City Apr-25 Mar-25 m-o-m % Delhi 89,441.18 95,311.72 -6 Kolkata 91,921.00 97,588.66 -6 Mumbai 83,575.42 89,070.03 -6 Chennai 92,503.80 98,567.90 -6 Source: IOC Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil’s Bauna oilfield restarts after maintenance


25/04/02
25/04/02

Brazil’s Bauna oilfield restarts after maintenance

Sydney, 2 April (Argus) — Brazil-focused Australian oil and gas company Karoon Energy has brought its Bauna oilfield in the offshore Santos basin back on line after the completion of intervention works at its SPS-88 well in February. Production resumed on 27 March after the project was shut down for maintenance on 7 March, Karoon said. The field's output has since reached about 26,500 b/d, above pre-shutdown levels because of the return of SPS-88 well production on 28 March. The well is pumping 2,000 b/d of oil on a restricted choke and is gradually being opened further, with rates in line with expectations. The intervention was originally planned for October-December 2024 after being taken off line in November 2023 because of a mechanical blockage in the gas lift valve. Karoon's plans to acquire the Cidade de Itajai floating production, storage and offloading (FPSO) unit at its Bauna oilfield have progressed, with the transaction on track to close as forecast in April. Selection of a new operations and maintenance contractor for the FPSO will be announced in mid-2025, with an updated cost guidance to be provided once terms are agreed. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Canada oil producers get 6pc 1Q lift on weaker currency


25/04/01
25/04/01

Canada oil producers get 6pc 1Q lift on weaker currency

Calgary, 1 April (Argus) — A depreciating Canadian dollar is giving oil sands producers an extra lift and complementing relatively strong domestic crude prices to help weather tariff concerns. The Canadian dollar, on average, was worth C$1.44 to one US dollar in January-March 2025, weakening from C$1.35 to the greenback in the same quarter 2024, according to the Bank of Canada. That represents a more than 6pc advantage to Canadian producers selling crude in US dollars who then turn those earnings around to pay workers and suppliers in local currency. The outright price for heavy sour Western Canadian Select (WCS) at Hardisty, Alberta, settled at $58.67/bl in the first quarter this year, according to Argus data. This is only $1/bl higher than the same period last year, but with the now weaker Canadian dollar, that converts to over C$84/bl for producers who would have seen that under C$78/bl in the first quarter 2024. The Canadian dollar, on average, was worth C$1.37 to the US dollar in 2024, weakening from C$1.35 to the greenback in 2023 and the weakest annual average since 2003. The Bank of Canada largely attributes the sliding Canadian dollar to a rising foreign exchange rate risk premium, which relates to holding currencies other than the US dollar. This premium rises with uncertainty that has been amplified by US president Donald Trump's tariff actions in recent months, and that has also weighed on currencies from other economies, hitting developing countries' currencies harder than those of advanced economies. Also keeping the US dollar elevated is the US Federal Reserve's recent caution about resuming its cycle of cutting interest rates, thus attracting relatively more investors to US Treasury bills and boosting demand for US dollars. Canada meanwhile has brought its target rate lower to try to get ahead of an anticipated economic slowdown. The Fed's Federal Open Market Committee (FOMC) on 19 March held the federal funds rate unchanged at 4.25-4.50pc for a second consecutive meeting after cutting at the last three meetings of 2024. The Bank of Canada a week earlier lowered its overnight rate for the seventh consecutive time to 2.75pc. Giving a more obvious boost to Canadian producers in the first quarter this year compared with a year earlier have been the appreciating domestic crude prices relative to the US light sweet benchmark, which has weakened across the same period. WCS trades at a discount to the Nymex WTI calendar month average (CMA) and that gap has narrowed on the back of new export pipeline capacity out of Canada, added in May 2024. WCS traded at about $12.75/bl under the WTI CMA across the first quarter this year, compared with a $19.25/bl discount a year earlier. More recent trade activity shows WCS for April-delivery narrowing further yet to within $10/bl under the basis — the tightest since April 2021 — with oil sands producers temporarily shutting in some production to embark on major maintenance . By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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