US September OCTG, line pipe imports may rise

: Crude oil, Metals, Natural gas, Pipe and tube
24/10/09

US imports of oil country tubular goods (OCTG) and line pipe products could increase in September.

US OCTG imports could be 114,500 metric tonnes (t) in September, which would represent an increase of 15,200t compared to the prior year, according to license data from the US Department of Commerce, which is subject to change.
If realized the September OCTG rise would be driven by a potential 19,800t increase from the prior year from South Korea to 60,600t and a 7,700t increase in volumes from Taiwan, up from none in the prior year.
Those increases are partially offset by a possible 8,400t decrease in volumes from Canada and a 5,100t decrease from Mexico.
If September OCTG import volumes do rise, it will be only the second month since May 2023 that import volumes have increased year over year.
Line pipe imports may jump by 19,200t from the prior year to 101,800t.
That increase could be driven by a 9,500t increase in line pipe of unspecified diameter from South Korea to 34,700t, and a 3,900t increase in Japanese volumes for line pipe less than or equal to 16in.

By Rye Druzchetta

US pipe and tube import licenses					metric tonnes
Product	Sep-24	Sep-23	Difference	±%	Aug-24
OCTG	114,521	99,310	15,211	15.3%	129,096
Line pipe*	101,777	82,589	19,188	23.2%	84,940
Standard	56,725	56,488	237	0.4%	63,929
Heavy Structural Shapes	57,682	43,364	14,318	33.0%	66,669
US Department of Commerce; September 2024 data is license data, which is subject to change.
*Line pipe is all diameters.

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24/12/31

US crude output at record 13.46mn b/d in Oct: EIA

Calgary, 31 December (Argus) — US crude production in October rose to a record high 13.46mn b/d on sustained strength in Texas and New Mexico, the Energy Information Administration (EIA) said today in its Petroleum Supply Monthly report. Output rose from 13.2mn b/d in September and from 13.15mn b/d in October 2023. The prior record of 13.36mn b/d was set in August. Texas, home to 44pc of the country's crude production, pumped out a record 5.86mn b/d in October, up from 5.8mn b/d in September and up from 5.57mn b/d in October 2023. New Mexico, which shares the prolific Permian basin with Texas, produced 2.08mn b/d in October, ticking down by 5,000 b/d from record highs set in August and September but up from 1.8mn b/d in October 2023. US offshore crude output in the Gulf of Mexico rebounded to 1.85mn b/d in October after hurricane activity in September cut production to 1.57mn b/d. Still, US Gulf of Mexico output was down from 1.94mn b/d in October 2023. Monthly production changes inland were mixed, with North Dakota falling to 1.16mn b/d in October from 1.21mn b/d in the month prior. Bakken shale basin producers had to contend with wildfires during the month and effects are still lingering for some, state officials said earlier this month. Colorado output rose in October to the highest in more than four years at 499,000 b/d. This was up from 476,000 b/d in September and the highest level for the state since March 2020. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: 2025 Hardisty heavy diffs may remain strong

24/12/31

Viewpoint: 2025 Hardisty heavy diffs may remain strong

Calgary, 31 December (Argus) — Heavy crude spot differentials in Alberta are expected to remain strong into next year, even with growing oil sands production and possible US import tariffs. After years of cost-overruns and construction delays, the 590,000 b/d Trans Mountain Expansion (TMX) commenced on 1 May, nearly tripling the capacity of crude able to reach Canada's Pacific coast and providing Alberta oil sands producers with increased access to buyers on the US west coast and Asia-Pacific. Extra egress capacity for Alberta crude westward has pulled previously apportioned volumes away from Enbridge's 3mn b/d Mainline system — Canada's main method of export to ship crude south to US refiners in the midcontinent and Gulf coast. In the fourth quarter, apportionment averaged just over 1pc for both light and heavy crude on the Mainline, significantly lower than the average apportionment of 21pc for lights and heavies in the fourth quarter last year. While president-elect Donald Trump's looming blanket tariff on all Canadian imports would re-direct more Albertan crude westward via TMX to Asia- Pacific buyers, many believe the tariff would be too harmful to US midcontinent refiners for Trump to actually carry out his threat. Prior to TMX's commencement, high apportionment combined with rising crude production heading into the winter months forced more crude onto railcars, which typically requires a $15/bl to $20/bl spread between Western Canadian Select (WCS) at Hardisty Alberta, and Houston, Texas, for uncommitted shippers to profit. With the redirection of apportioned volumes to buyers in the west, Canadian heavy spot differentials in Alberta have strengthened in a quarter when discounts have generally widened in recent years. Argus's WCS Hardisty assessment averaged a $12.08/bl discount to the CMA Nymex WTI during fourth quarter Canadian trade cycle dates, $11.52/bl stronger than the $23.61/bl discount averaged in the fourth quarter a year prior. Yet, crude output in Alberta's key oil sands is expected to rise heading into 2025, with production levels reaching record-high levels this year. Alberta crude output was 4.2mn b/d in October, according to the latest Alberta Energy Regulator (AER) data, up by 9.4pc year from a year earlier and the second highest monthly production on record. Alberta oil sands producers, meanwhile, have increased their crude production guidance for next year. Suncor expects to pump out 810,000-840,000 b/d across its upstream sector in 2025, up by 5pc from 2024. Cenovus expects to increase production next year by 4pc to between 805,000-845,000 b/d of oil equivalent (boe/d), and Imperial Oil plans to boost upstream production by 2pc to 433,000-456,000 boe/d. Egress capacity remains ample despite rising production heading into 2025. Total crude pipeline egress capacity out of Alberta is expected to be over 4.6mn b/d in 2025, with shippers still yet to utilize uncommitted space on the 890,000 b/d Trans Mountain pipeline. About 712,000 b/d or 80pc of the system is reserved for contracted shippers, with the remaining 20pc available for uncontracted shipments. With unconstrained egress capacity expected to persist, Suncor and Cenovus have both assumed WCS at Hardisty will average a strong $14/bl discount to WTI in 2025. In the near term, Trump's plans to impose a blanket 25pc tariff on all Canadian imports would threaten some US demand for Canadian crude. Yet, while some traders are pricing in the reality of US tariffs, most market participants are skeptical of whether Trump's tariff plans would extend to Canadian crude due to the co-dependency between Albertan producers and some US refiners. US midcontinent refiners, many of whom were financial backers of Trump's 2024 presidential campaign, are dependent on Canadian crude given a lack of access to alternative heavy sour crudes suited for their refineries. Canadian grades represent approximately 70pc of the US midcontinent refinery feedstock, with the remainder largely sourced in the US. US importers may take more crude from countries including Saudi Arabia, given the country has plenty of spare capacity to increase the production of heavy sour crude favored by US midcontinent refiners. However, replacing Canadian crude with waterborne supplies would result in a substantial increase in tanker demand. In August, only around 370,000 b/d of the 3.8mn b/d of Canadian crude imported by US refiners moved on tankers, Vortexa data show. Even if US refiners can replace Canadian and Mexican heavy crude, they are expected to face higher landed costs and, potentially, less reliable supplies. By Kyle Tsang Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US Supreme Court tees up more energy cases

24/12/31

Viewpoint: US Supreme Court tees up more energy cases

Washington, 31 December (Argus) — The US Supreme Court is on track for another term that could significantly affect the energy sector, with rulings anticipated in the new year that could narrow environmental reviews and challenge California's authority to set its own tailpipe standards. The Supreme Court earlier this month held arguments in Seven County Infrastructure Coalition v Eagle County, Colorado , a case in which the justices are being asked to decide whether federal rail regulators adequately studied the environmental effects of a proposed 88-mile railway that would transport 80,000 b/d of crude. A lower court last year found the review, prepared under the National Environmental Policy Act (NEPA), should have analyzed how building the project would affect drilling and refining. Business groups want the Supreme Court to issue an expansive ruling that would limit NEPA reviews only to "proximate" effects, such as how rail traffic could affect nearby wildlife, rather than reviewing distance effects. The court recently agreed to hear a separate case that could restrict California's unique authority under the Clean Air Act to issue its own greenhouse gas regulations for newly sold cars and pickup trucks that are more stringent than federal standards. Oil refiners and biofuel producers in that case, Diamond Alternative Energy v EPA , say they should have "standing" to advance a lawsuit challenging those standards — even though they could now show prevailing in the case would change fuel demand — based on the alleged "coercive and predictable effects of regulation on third parties". These two cases, likely to be decided by the end of June, follow on the heels of the court's blockbuster decision in June overturning the decades-old "Chevron deference", a foundation for administration law that had given federal agencies greater flexibility when writing regulations. Last term, the court also limited agency enforcement powers and halted a rule targeting cross-state air pollution sources. This term's cases are unlikely to have as far-reaching consequences for the energy sector as overturning Chevron. But industry officials hope the two pending cases will provide clarity on issues that have been problematic for developers, including the scope of federal environmental reviews and the ability of industry to win legal "standing" to bring lawsuits. Two other cases could have significant effects for the oil sector, if the court agrees to consider them at a conference set for 10 January. Utah has a pending complaint before the court designed to force the US to dispose of 18.5mn acres of "unappropriated" federal land in the state, including oil-producing acreage. Utah argues that indefinitely retaining the land — which covers about a third of Utah — is unconstitutional. In another pending case, Sunoco and other oil companies have asked for a ruling that could halt a series of lawsuits filed against them in state courts for alleged damages from greenhouse gas emissions. President-elect Donald Trump's re-election could create complications for cases pending before the Supreme Court, if the incoming administration adopts new legal positions. Trump plans to nominate John Sauer, who successfully represented Trump in his presidential immunity case, as his solicitor general before the Supreme Court. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Policy uncertainty dogs battery anode plans

24/12/30

Viewpoint: Policy uncertainty dogs battery anode plans

Washington, 30 December (Argus) — Former president Donald Trump's re-election is sparking uncertainty in the US' synthetic graphite battery sector, with companies worried about a possible halt to government finance and a weaker outlook for domestic demand. "With Trump being elected president, everything's up in the air," one industry source said. Battery materials companies expecting to receive government funding to build plants in the US could see their prospects dim with Trump coming into office , since these companies need the federal grants to compete with China, a second source said. Trump on the campaign trail said he would rescind all unspent funds in President Joe Biden's Inflation Reduction Act (IRA) and scrap Environmental Protection Agency tailpipe standards, which he called an electric vehicle (EV) "mandate". The Biden administration is racing to try and secure projects set to be funded by the IRA. On 16 December, US battery materials producer Novonix received a conditional loan for up to $754mn for a new synthetic graphite plant from the US Department of Energy (DOE). If finalised, the loan would be used to build a new 31,500 t/yr synthetic graphite plant in Tennessee by the end of 2028. DOE previously awarded Novonix a $100mn grant and a $103mn tax credit to expand capacity at its Tennessee plant to 40,000 t/yr by 2025 and 150,000 t/yr by 2030. DOE on 16 December also closed on its up to $9.6bn loan to South Korean battery manufacturer SK On for the construction of three battery plants in the US, the largest loan ever awarded under its Advanced Technology Vehicles Manufacturing Program. DOE also in September selected SKI US , part of India-based Birla Carbon, to receive $150mn build a 25,000 t/yr synthetic graphite production plant in South Carolina. Some in Trump's orbit have warned they will review contracts they view as hastily pushed out before the former president takes office . But some Republicans are likely to oppose full repeal of the IRA, since the bill funds projects in their districts. And Republicans will hold a razor-thin majority in the House of Representatives. Even if Republicans do not repeal the IRA or other EV subsidies like tax credits, the uncertainty surrounding the new administration's support could be a stumbling block. "Who's going to put half a billion dollars into a battery plant right now when you don't have certainty on the push for EVs?" the first source said. Battery projects require huge amounts of investment. Swedish battery maker Northvolt obtained record venture capital investment for a European start-up at $15bn. But on 21 November, the company filed for Chapter 11 bankruptcy protection in the US , in part because of difficulties "bridging financing between different stakeholders", outgoing chief executive Peter Carlsson said. The company had already closed down its R&D facility in the US and put plans for factories in Canada, Germany and Sweden on hold. Its financial woes intensified after the Swedish government declined to invest. Other European governments have already reduced financial support for EVs, more for spending reasons than policy, which has softened demand in the region. France recently changed eligibility requirements for subsidies , and Germany ended its subsidy late last year. Some companies, like Norwegian battery materials company Vianode, have been planning multi-billion dollar investment programmes to expand their reach in the automotive industry throughout North America and Europe. It is not clear if Trump's election will have an effect on these plans. Vianode opened its first anode graphite production plant, Via One, in Herøya, Norway, in October. The plant will have a capacity of 2,000 t/yr, enough to supply 30,000 EVs annually, according to Vianode. Chinese firms have scaled up production of key battery materials at all stages of the supply chain, creating more competition for European and US producers. Chinese producers dominate the global EV market with about 70pc of market share, even as the EU and US have put policies in place to try to support their domestic industry. China's lithium-ion battery exports to the US jumped in November as suppliers looked to get ahead of potential new tariffs. The Trump administration is likely to increase tariffs on Chinese lithium-ion batteries to as much as 60pc in the coming few months after Biden earlier this year lifted them to 25pc from 7.5pc. This could help support US-based battery plants. But tariffs on Chinese goods could also present additional challenges, as the raw materials for synthetic graphite often have some Chinese components. Needle coke, traditionally the main raw material for synthetic graphite used in battery anodes, is not widely produced outside of China. And while companies in China have been researching options for using a wider range of petroleum coke qualities , specifications are still relatively narrow, with battery companies in China absorbing most of the world's suitable coke . One graphite anode plant in Europe has been struggling to procure petroleum coke, according to a market participant. Sourcing coke for synthetic graphite in Europe and other ex-China locations is likely challenging, as most of these refineries and calciners have tied up their supply in long-term commitments, one producer said. Refineries are also reducing coke production, as the required feedstocks have become more costly. By Lauren Masterson and Hadley Medlock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Zinc prices to drop in 2025 on higher supply

24/12/30

Viewpoint: Zinc prices to drop in 2025 on higher supply

London, 30 December (Argus) — Zinc prices increased this year as supply was tight, but prices are expected to soften next year because of improved supply and continued weak demand in key consumption markets. Zinc has been one of the best performers of the London Metal Exchange base metals this year, trading above $3,000/t going into December compared with a $2,537/t average in January. This puts this year's average price 6pc higher than the 2023 average. The price strength seen this year can be attributed to supply pressures, including production disruptions at key mines. Global mining group Glencore's McArthur River mine in Australia halted operations in March owing to extreme rainfall, and Chinese mining company MMG's Dugald River mine in China was placed under care and maintenance during the third quarter. The zinc market had a 164,000t deficit in 2024, according to forecasts from the International Lead and Zinc Study Group (ILZSG), additionally driven by reduced mined output from Swedish metals producer Boliden's Tara mine in Ireland, and Portuguese mining company Almina's Aljustrel mines in Portugal. Higher supply forecast Supply is expected to increase in 2025, with ILZSG forecasting a surplus of 148,000t for the year, as new mine supply is scheduled to ramp up. One of the biggest supply-side developments is the reopening of Canadian mining firm Ivanhoe Mines' Kipushi mine in the Democratic Republic of Congo. Kipushi is expected to produce 278,000 t/yr of zinc over its first five years, and will become Africa's largest zinc mine and the fourth-largest globally, according to Ivanhoe. In Europe, higher output from Bosnia and Herzegovina and Portugal, and the reopening of the Tara operations in Ireland, will contribute to the overall increase in supply, according to ILZSG. Russia's production is also expected to rise, supported by the recently opened Ozerneoye plant . Australia, Canada, China, Japan, the Netherlands and Norway will also all see concentrate supply increases next year, particularly in the first quarter, with an expansion at Boliden's Odda smelter due to ramp up output early in the new year. Global mined supply has declined over the past three years, but trading firm Macquarie expects global mine supply to grow by 5.8pc in 2025. Total project approvals this year reached around 570,000 t/yr of zinc, Macquarie said in its 2025 global commodity outlook, published on 5 December. Persistent weak demand But demand growth may be insufficient to absorb this additional output, leading to oversupply in the coming years. Global carbon steel demand has fallen this year, as construction sector demand has generally been weak across most major economies, including China. Construction steel accounts for 55pc of zinc end demand, according to Macquarie. The Argus weekly ex-works northwest Europe assessment for hot-dipped galvanised steel — one of the main products that use zinc — has dropped by nearly 17pc from the start of the year to €665/t ($690/t) on 4 December, reflecting a struggling steel sector in Europe. European manufacturing activity also remains weak, with the automobile sector facing a number of factory closures because of subdued demand. German carmaker Volkswagen announced in late October that it plans to close at least three plants and lay off thousands of employees, as the firm attempts to save money amid falling sales because of an overall decrease in European car demand. And global automaker Stellantis plans to cut its inventories going into the new year. Macquarie predicts that global refined zinc demand will grow by 1.7pc in 2025, which is lower than the previously anticipated 2.5pc growth rate because of uncertainty surrounding potential new US tariffs following the inauguration of president-elect Donald Trump in January. The proposed tariffs could impact the strength of the US dollar and global trade. Zinc premiums in Europe decreased in 2024. The Argus Rotterdam SHG zinc premium dropped by nearly 30pc throughout the year, reflecting weaker consumption from downstream industries, particularly construction and manufacturing. Ongoing uncertainty over global economic conditions, high energy costs and new supply in Europe will likely play a role in keeping premiums subdued. Price outlook 2025 Given the anticipated supply surplus and the ongoing demand lag, analysts are generally bearish on zinc prices in 2025. The 2024 zinc price currently averages at $2,800/t, but the World Bank and ratings agency Fitch both expect this to decline to $2,600/t in 2025, followed by a further drop to $2,500/t in 2026. Similarly, Macquarie forecasts the zinc price to drop to $2,650/t next year and to $2,450/t in 2026, reflecting expectations of a market surplus. By Roxana Lazar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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