Nigerian road project push could see switch to concrete
The Nigerian government is involving some key concrete producers in a raft of new federal road projects across the country, signalling greater intent to switch away from asphalt.
Works minister David Umahi said last month that 20 new road projects are to be funded through the federal government's Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme and are to be supported by private-sector firms including Dangote Group, BUA Group, Mainstream Energy Solutions and MTN.
Suppliers of bitumen — which is used to make asphalt, the predominant material for road paving — say the involvement of Dangote and BUA, both important Nigerian cement producers, is likely to signal a greater intent by the government to push for a switch away from asphalt, which could significantly dent Nigerian bitumen demand growth prospects.
One market participant said most new federal road projects, including those under the tax credit scheme, are being designed on the basis of cement construction.
Umahi began pushing for a switch to concrete last summer after he took up his ministerial role. But some industry and political opposition to the move, as well as the high costs involved in concrete road construction, created uncertainty over the policy's progress. Meanwhile, Nigerian market participants have pointed out that large volumes of bitumen will still be needed for repair and maintenance of the existing road network.
Spanner in the works
Nigeria, which produces little to no bitumen itself, imported 280,000-290,000t last year, slightly higher than in 2022. Prior to the change in government last year, some bitumen suppliers had expected Nigerian consumption to reach as high 400,000-450,000 t/yr in the coming years. But the new government's concrete roads push has put a major dent in those expectations.
There was the usual seasonal surge in bitumen imports in the first half of this year during the peak dry season for road construction activity, but a decision by President Bola Tinubu's administration to sharply devalue the naira against the US dollar in late January drove up domestic bitumen truck prices, discouraging some buying.
A lagged reaction to the naira devaluation pushed domestic truck prices to N1.35mn/t ex-works by mid-February from N1.15mn/t at the start of the month, before rising further to reach a peak of N1.55-1.6mn/t in early March. A subsequent recovery in the value of the naira helped push prices back down to N1.2-1.3mn/t ex-works by early July. A renewed slide in the Naira followed, but was not accompanied by a rise in bitumen truck prices until mid-August.
One market participant said prices had been "shockingly stable" as suppliers tried to encourage buying during the low demand rainy season that usually runs from late June until October. Prices were raised to N1.32-1.35mn/t ex-works last week in a belated bid by suppliers to recover some margin.
Even when the Nigerian road construction season resumes later this year, the renewed push to encourage concrete road construction is likely to keep demand for bitumen and mixed asphalt in check, although the continued need at federal and state level for repair, maintenance and upgrade projects on existing asphalted roads should support consumption and imports.
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Work stoppage begins at Canadian railroads
Work stoppage begins at Canadian railroads
Washington, 22 August (Argus) — Operations at Canada's two largest railroads ended Thursday morning at 12:01am ET as a work stoppage began following the failure of labor contract talks. Canadian Pacific Kansas City (CPKC) and Canadian National (CN) locked out union members, while the Teamsters Canada Rail Conference (TCRC) launched a strike at CPKC. The union has not yet issued a strike notice to CN , but its workers are barred from the property. The work stoppage freezes ongoing train shipments even if they have not reached their destinations. The railroads last week stopped loading railcars with shipments of certain toxic and poisonous materials to keep products from being abandoned in unsafe locations, and this week stopped loading all commodities and other freight within Canada. Operations along CN and CPKC's US lines continue but trains cannot cross into Canada. The union confirmed just after midnight that work stoppages at CN and CPKC had begun. Most Teamsters members stopped work at 12:01am ET, though rail traffic controllers at CPKC will keep working until 2:01am ET. CPKC and CN announced they had formally locked out employees represented by the Teamsters union. CN said the union did not respond to an offer it had made in a last attempt to avoid the strike. Wide range of commodities in crosshairs The work stoppage will affect freight deliveries for a variety of goods across North America, including shipments of propane to rural communities, grain and coal deliveries to Canadian export terminals, and chemical inputs to manufacturing facilities. CN said Wednesday that grain prices were already being affected and that sawmills in British Colombia were cutting shifts. Coal exports from Canadian mines would be held because those operations are only served by CN and CPKC. But western US coal exports are not expected to see much of a disruption since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. BNSF will not be able to interchange railcars with CN and CPKC in Canada, however. Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity. Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike. Wide gap between workers, railroads The railroads and the Teamsters remain far apart on contract terms. The union — which represents roughly 9,300 train operators and support staff at CN and CPKC and 85 rail traffic controllers at CPKC — said forced relocation and scheduling and fatigue management that will lead to safety risks are the key points of dispute. CN said its offers, which have been turned down repeatedly, would have improved safety, increased wages, and provided employees with better schedules. CPKC chief executive Keith Creel on 19 August claimed union leadership had made "wildly inaccurate characterizations" about the railroad's proposals in order to "create a false public narrative" about negotiations. He said the railroad did not unilaterally change or cancel the terms of the most recent collective agreement or make proposals that compromise safety. Creel said most recently CPKC has focused on a status quo-style contract renewal with a duration of three years. That proposal would have no work rule changes and the railroad only wanted to negotiate "reasonable adjustments" to the timing of held-away pay to address regulatory changes made by Transport Canada last year. CN called on Canadian minister of labour Steven MacKinnon to intervene this week. He has already been meeting with each railroad and the Teamsters. CPKC this week reiterated earlier calls for binding arbitration, but MacKinnon rejected that request on 15 August. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian rail labor talks continue as deadline nears
Canadian rail labor talks continue as deadline nears
Cheyenne, 21 August (Argus) — Canadian railroads and a major labor union are still in discussions in the final hours before workers could go on strike. Contract negotiations between Canadian Pacific Kansas City (CPKC), Canadian National (CN) and Teamsters Canada Rail Conference (TCRC) continued today, CPKC said. If there is no agreement tonight, the union at 12:01am ET Thursday could begin a strike against CPKC and each railroad could begin a lockout of workers. The Teamsters did not issue a required strike notice to CN, but a lockout would still shut its network down. Railroad customers and Canadian authorities are increasingly frustrated by the lack of agreement on new labor contracts. Teamsters members have been working under the terms of contracts that expired in December 2023. Canadian prime minister Justin Trudeau today urged the railroads and union to resolve the situation and avert a strike. "It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution," Trudeau said. "Millions of Canadians, of workers, of farmers, of businesses, right across the country are counting on both sides to do the work and get to a resolution." Canadian minister of labour Steven MacKinnon yesterday said he met with Ontario's labour minister and would be meeting with each railroad and Teamsters officials in Montreal and Calgary "to deliver our shared message: Get a deal at the table. Workers, farmers, businesses and all Canadians are counting on it." Union members have voted twice to authorize a strike, and each railroad has indicated it will lock out union members at the same time. The latest indication is the strike could happen as early as Thursday 22 August. "CPKC remains focused on and committed to arriving at a negotiated outcome that is in the best interests of all our railroaders and their families," CPKC said today. "We are firmly committed to staying at the bargaining table to reach renewed agreements." The Teamsters and CN did not respond to requests for comment. Last week, the railroads initiated embargoes on shipments of toxic inhalation hazards (TIH) and poisonous inhalation hazards (PIH) materials. Those products include chlorine, ammonia, ethylene and phosgene, as well as rail security-sensitive materials such as explosives. Each carrier has now stopped loading trains in Canada and are focused on delivering existing shipments. Railroads also have stopped shipping trains across the US and Canada border, suspending the movement of multiple products. US rail regulators are actively monitoring the situation, concerned about how a rail labor strike in Canada would affect the US rail network and supply chain. The US Surface Transportation Board said Wednesday it is monitoring the implementation and effects of those embargoes on the network. A number of US railroads last week either implemented their own embargoes or said they will comply with the Canadian embargoes. Western US coal exports are not expected to have much of a disruption if there is a strike since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. But BNSF will not be able to interchange railcars with CN and CPKC in Canada. Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity. Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike . By Courtney Schlisserman and Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Thin exports could add to US jet fuel surplus
Thin exports could add to US jet fuel surplus
Houston, 20 August (Argus) — US jet fuel stockpiles that are already at a 14-year high for August could build even further if exports continue to lag. Waterborne jet fuel loadings from the US Gulf coast are on pace for the lowest monthly average since March 2021 at 32,800 b/d through the first 20 days of August, according to oil analytics firm Vortexa. Departures are down by 31pc from the same period last year and lag behind average daily July volumes by 71pc. This month's drop in export loadings follows a July in which Gulf coast jet fuel discharged in other countries trailed year-earlier levels by 25pc. US Gulf coast jet fuel discharged in Mexico last month was down by 7.6pc from July 2023, while arrivals in Mexico through the first 20 days of August are so far little changed from August 2023. US Gulf coast jet fuel deliveries in Canada this month are down by 25pc on the year, Vortexa data shows. The dip in Gulf coast exports could add to US supplies at a time when domestic jet fuel demand may taper as the summer travel season nears its end. Passenger screenings at US airports fell to an 11-week low last week, according to US Transportation Security Administration data. Falling demand and building inventories helped sink US jet fuel prices to multi-month lows on Monday as front-month Nymex diesel futures fell by 2.8pc. Colonial Pipeline jet fuel at the Gulf coast fell on Monday by 7.45¢/USG to $2.12/US and Buckeye jet fuel prices at the New York Harbor shed 7.27¢/USG to $2.17/USG, both the lowest since May 2023. Jet fuel stocks swell in August Total US jet fuel stocks during the week ended 9 August swelled by 12pc to 46.24mn bl, the highest for any August week since 2010, according to the latest estimates from the US Energy Information Administration (EIA). Still, US inventories have eased by nearly 2pc since peaking in late July at 47.18mn bl, the highest for any week since October 2018. Inventories have climbed across much of the US, with stocks in the Atlantic coast, Gulf coast, and west coasts notching multi-year highs for August weeks. Atlantic coast jet fuel inventories in the week ended 2 August were the highest for August since 1990 at 13.13mn bl, while Gulf coast stocks in the following week reached a three-year high for August at 14.26mn bl. In the US west coast, jet fuel stocks were the highest for any August week in at least 34 years at 11.82mn bl the week ended 9 August, EIA data show. The US midcontinent is the lone US region where inventories are down on the year, as refinery issues have stunted production in the Chicago, Illinois, area. ExxonMobil's 252,000 b/d Joliet refinery in Channahon, Illinois, reported a process unit upset from 17-18 August, extending weeks of issues stemming from a power outage in mid-July. This has prompted viable arbitrage economics between the US Gulf coast and Chicago since 25 July, with Chicago prices averaging a 16.91¢/USG premium to the Gulf coast during that stretch. The arbitrage opportunity for sending Gulf coast jet fuel to the New York Harbor has been closed on paper since 13 August. By Jared Ainsworth Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Bulk carriers mostly score low CII in 2023
Bulk carriers mostly score low CII in 2023
New York, 20 August (Argus) — More than half of bulk carriers scored carbon intensity indicator (CII) grades of C or lower on an A-E scale in 2023, according to International Maritime Organization (IMO) data. About 61pc, or 9,127 of all bulk carriers sized 5,000 gross tonnes (gt) and over that reported their energy efficiency, scored C, D or E on the CII scale in 2023, according to the IMO data. IMO's CII regulation, which came into force in January 2023, requires vessels over 5,000 gt to report their carbon intensity, which is then scored from A to E. A and B vessel scores are regarded as superior energy efficiency, while C, D and E are considered moderate to inferior scores. The scoring levels are lowered yearly by about 2pc, so even a vessel with no change in CII could drop from from C to D in one year. If a vessel receives a D score three years in a row or E score in the previous year, the vessel owner must submit a corrective actions plan. To improve its CII score, a ship owner could reduce its speed and burn low-carbon fuels, among other solutions. Global marine fuel demand from vessels of 5,000 gt and above dropped by 1pc to 211.1mn t in 2023, down from 213.4mn t in 2022, according to the latest IMO data. The drop could be attributed to the global economic slow-down in 2023, as well as vessels employing slow steaming to reduce marine fuel consumption. Residual fuel oil bunker demand was down by 2pc to 170.9mn t in 2023 from the previous year, according to IMO data. The IMO does not report separately high-sulphur and low-sulphur fuel oil demand. Global marine gasoil (MGO) demand fell by 6pc to 26.6mn t. An increase in methanol and LNG for bunkering demand offset some of the conventional marine fuel declines. LNG for bunkering demand rose by 18pc to 12.9mn t and methanol increased by 2.6 times to 93,876t. In 2023, container ships, bulk carriers and tankers accounted for 31pc, 30pc and 21pc, respectively, of global residual fuel oil bunker demand. Containers ships and bulk carriers accounted for the majority of the MGO demand, 18pc and 15pc, respectively. Tankers accounted for 93pc, or 87,319t, of total methanol demand and LNG carriers accounted for 89pc of LNG for bunkering demand, or 11.5mn t. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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