Mark Latham Commodity Equity Intelligence Service

Thursday 20th August 2015
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    Macro

    It ain't over until the fat lady sings.

     

    It ain't over till the fat lady sings

    From Wikipedia, the free encyclopedia
    Amalie Mater 

    It ain't over till (or untilthe fat lady sings is a colloquialism. It means that one should not presume to know the outcome of an event which is still in progress. More specifically, the phrase is used when a situation is (or appears to be) nearing its conclusion. It cautions against assuming that the current state of an event is irreversible and clearly determines how or when the event will end. The phrase is most commonly used in association with organized competitions, particularly sports.

    The phrase is generally understood to be referencing the stereotypically overweight sopranos of the opera. The imagery of Richard Wagner's opera cycle Der Ring des Nibelungen and its last part,Götterdämmerung, is typically the one used in depictions accompanying reference to the phrase. The "fat lady" is the valkyrie Brünnhilde, who is traditionally presented as a very buxom lady withhorned helmetspear and round shield (although Brünnhilde in fact wears a winged helmet[citation needed]). Her aria lasts almost twenty minutes and leads directly to the end of the opera.[1] AsGötterdämmerung is about the end of the world (or at least the world of the Norse gods), in a very significant way "it is [all] over when the fat lady sings."

    Attribution[edit]

    The first recorded use appeared in the Dallas Morning News on 10 March 1976, by journalist Ralph Carpenter:[2]

    Despite his obvious allegiance to the Red RaidersTexas Tech sports information director Ralph Carpenter was the picture of professional objectivity when the Aggies rallied for a 72–72 tie late in the SWC tournament finals. "Hey, Ralph," said Bill Morgan, "this... is going to be a tight one after all." "Right", said Ralph, "the opera ain’t over until the fat lady sings."

    In the same newspaper on 26 November 2006, Steve Blow followed up the discovery by contacting Bill Morgan about the incident:[3]

    "Bill vividly remembers the comment and the uproar it caused throughout the press box. He always assumed it was coined on the spot. 'Oh, yeah, it was vintage Carpenter. He was one of the world’s funniest guys,' said Bill, a contender for that title himself."



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    China’s energy guzzlers Jan-Jul power use down 2pct on yr

    China’s energy guzzlers Jan-Jul power use down 2pct on yr

    Power consumption of China’s four energy-intensive industries dropped 2% on year to 962.4 TWh over January-July this year, accounting for 30.4% of the nation’s total power consumption, the China Electricity Council (CEC) said on August 19.

    Of this, the ferrous metallurgy industry consumed 294.3 TWh of electricity over January-July, down 7.4% year on year, compared to the growth of 2.2% from the previous year; while the non-ferrous metallurgy industry used 250.8 TWh of electricity, up 4.6% year on year, unchanged from the year-ago growth.

    The chemical industries consumed 243.5 TWh of electricity over January-July, up 2.3% year on year, lower than a 0.6% growth a year ago; while power consumption of building materials industry dropped 6.7% year on year to 173.8 TWh, compared to a 8.7% rise in the preceding year.

    In July, the four industries consumed a total 143.2 TWh of electricity, down 4.9% year on year, accounting for 28.4% of China’s total power consumption.

    Of this, the ferrous metallurgy industry consumed 42.9 TWh of electricity in July, dropping 12.4% on year and down 3.16% on month; while the non-ferrous metallurgy industry used 36.4 TWh of electricity, up 1.3% from a year ago but down 2.93% on month.

    http://en.sxcoal.com/0/130035/DataShow.html

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    Iron explorer sells eggs as Australia goes from mining to dining

    Iron explorer sells eggs as Australia goes from mining to dining

    The iron-ore business is so lousy that one Canadian mining company is shelving its biggest project and starting a new venture: selling Australian eggs to China.

    The abrupt shift at Century Iron Mines Corp. was prompted by a global iron-ore surplus that sent prices plunging 68 percent in four years. Chief Executive Officer Sandy Chim doesn’t expect a recovery until 2018, so he’s taken a cue from Australian mining billionaires Gina Rinehart and Andrew Forrest, who are expanding into food production as demand rises across Asia.

    “Australia is going from mining to dining,” Chim said by telephone from Toronto, where the company created a unit called Century Food. The plan is to distribute eggs produced by Sunny Queen Pty., a chicken-farmer cooperative in Queensland, to consumers in Hong Kong and Macau.

    With the backing of Wuhan Iron & Steel Corp. and China Minmetals Corp., the government-owned companies that own 30 percent of Century Iron Mines, Chim is investing C$2 million ($1.5 million) in the egg venture. He’s drawing on capital originally intended for Century’s flagship Joyce Lake mine project straddling the Canadian provinces of Quebec, and Newfoundland and Labrador.

    As recently as November, after tests indicated 24.3 million metric tons of reserves, Century was expecting to spend C$250 million on development and start production in 2017. But iron ore went from bad to worse as producers like Rio Tinto Group, Vale SA and BHP Billiton Ltd. expanded output from lower-cost mines. At the same time, demand slowed from steelmakers in China, who use about 70 percent of output.

    “Sometimes it is a question of survival,” Meyer said. Mining entrepreneurs “are good at following the money and not patient enough to wait for the cycle to turn,” he said.

    Century isn’t alone. In January, All Ore Mineracao SA in Brazil said it would abandon projects in iron ore and gold to produce cosmetics. All Ore’s shares surged as much as 70 percent on the news, and the company became Sweet Cosmetics SA.

    “We are going to sit on it and wait until the market comes back,” Chim said. For now, Chim’s bet on the appetite for eggs in China is mimicking ventures by two iron-ore billionaires. Andrew Forrest last year acquired Harvey Beef in Australia to export meat to China. Gina Rinehart, the richest woman in Australia, last year bought stakes in two ranches and invested A$500 million ($367 million) in supplying infant formula to China.

    As incomes rise, Chinese consumers are eating more meat and protein, according to Bloomberg Intelligence and the U.S. Department of Agriculture. Demand for imports also is growing after trust in domestic food supplies was undermined by scandals involving tainted products.

    In addition to shelled eggs, Century plans to distribute Sunny Queen products including ready-made omelets, poached and scrambled eggs. Century also may expand into other foods, Chim said.

    “As a supplier of commodities to China from the rest of the world, we see this as a logical extension because of our networks and talent there,” Chim said.

    http://www.mineweb.com/news/iron-and-steel/iron-explorer-sells-eggs-as-australia-goes-from-mining-to-dining/

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    Oil and Gas

    Saudi oil exports rise by 430,000 bpd in June

    Saudi oil exports rise by 430,000 bpd in June

    Saudi Arabia's crude oil exports rose by 430,000 barrels per day (bpd) in June, while oil used by the country's power sector surged to its highest in almost a year, official data showed on Wednesday.

    Saudi Arabia ramped up its crude production to a record in June, reaffirming its strategy of defending market share and feeding a rise in global as well as domestic demand.

    The world's biggest crude exporter shipped 7.365 million bpd in June, up from 6.935 million bpd in May, figures published by the Joint Organisations Data Initiative (JODI) showed.

    Saudi Arabia burns higher crude volumes to generate power for air-conditioning during the hot summer months. It has also been feeding more crude to domestic refineries as it expands oil product exports, though such plants refined less in June.

    Domestic refineries processed 2.099 million bpd, down from 2.423 million bpd in May, the JODI data showed.

    Crude oil directly burnt by Saudi Arabia to generate power surged to 894,000 bpd in June from 677,000 bpd in May.

    Exports of refined oil products in June fell to 1.008 million bpd, from 1.318 million bpd a month earlier.

    The Kingdom's rapid transition into one of the largest oil refiners adds an extra dimension to global oil markets.

    State oil giant Saudi Aramco has stakes in more than 5 million bpd of refining capacity, at home and abroad, landing it a place among the global leaders in making oil products.

    JODI compiles data supplied by oil-producing members of global bodies including the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC).

    Saudi Arabia's crude production for June stood at 10.564 million bpd, up from 10.333 million bpd in May.The Kingdom told OPEC it trimmed production by 200,000 bpd to 10.36 million bpd in July.

    http://www.arabnews.com/news/794021

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    $15 Oil?

    One big-name investor is predicting an even sharper drop.

    "There is no evidence whatsoever to suggest we have bottomed. You could have $15 or $20 oil -- easily," influential money manager David Kotok told CNNMoney.

    A further decline to $15 a barrel would be huge. Oil hasn't traded that low since early 1999, when gasoline at the pump was selling for under $1 a gallon.

    Kotok's views on the economy and financial markets are closely watched. The 72-year-old co-founder of Cumberland Advisors manages more than $2 billion in assets and hosts an annual invite-only fishing trip that doubles as an economic summit. Known as "Camp Kotok," the event lures leaders in finance to Maine each summer.

    "I'm an old goat. I remember when oil was $3 a barrel," said Kotok, whose clients include former New Jersey Governor Thomas Kean.

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    US Oil Exports: Mexico swaps move the door an inch.

    HOUSTON, Aug. 19 (UPI) -- Approval for oil swaps with Mexico opens the spigot for U.S. crude oil, but might not be the export indication supporters hope for, an industry analyst said.

    The U.S. Commerce Department last week granted a request from Mexican energy company Petroleos Mexicanos, known also as Pemex, to swap as much as 100,000 barrels of U.S. crude oil per day for Mexican refining. The deal forbids the re-export to other nations.

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    No wonder the $ acts like a rock.

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    There's some serious anger issues out there.

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    Origin Energy flags spending jump, flat earnings; shares skid

    Origin Energy flags spending jump, flat earnings; shares skid

    Origin Energy, Australia's top gas and power retailer, flagged a 44 percent jump in forecast spending on its flagship gas project and flat earnings from its core business this year, sending its shares tumbling to 7-1/2-year lows on Thursday.

    Sydney-based Origin said it would have to spend A$1.8 billion, up from a previous forecast of A$1.25 billion, as its remaining cash contribution for the giant Australia Pacific liquefied natural gas (APLNG) project in Queensland state, which is due to start producing in the December quarter.

    The increased spending is due to lower oil prices, a previously flagged delay in first production and new drilling to maximise throughput at the plant, it said.

    Investors were worried about the impact on Origin's stretched balance sheet with oil-linked LNG prices expected to remain weak, and because investors had expected some growth in the energy markets business, two analysts said.

    "They have a very weak balance sheet," said an analyst with a fund manager which does not own Origin shares due to its high gearing.

    He said the extra injection of funding for APLNG would make what are already slim margins even skinnier in a weak oil market, limiting gains to shareholders who have been waiting for the benefits from the A$25 billion APLNG project to kick in.

    Origin reported a 4 percent fall in underlying profit to A$682 million ($501 million) for the year to June 2015 on Thursday, and held its final dividend steady at 25 cents a share, meeting a promise to pay out at least 50 cents a year.

    The three major credit rating agencies have all downgraded Origin this year, with Moody's the latest following the company's sale of its stake in Contact Energy.

    Origin Managing Director Grant King said the company would focus on debt reduction rather than increasing dividends as long as oil prices remained weak and was confident its A$5.8 billion in debt facilities and cash would be ample.

    "That will not only fund those commitments but ensure we can endure a prolonged period of low oil prices," he told reporters.

    http://www.reuters.com/article/2015/08/20/origin-results-idUSL3N10V1SH20150820

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    Premier Oil’s cash flow up as industry “resets”

    Premier Oil’s cash flow up as industry “resets”

    A strong North Sea performance saw Premier Oil’s cash flow rise for the first half of the year.

    The firm reported an operating cash flow of $510million – up from last year’s $499.4million.

    Chairman Mike Welton said: “The UK delivered a strong production performance while at the same time operating costs have been reduced significantly, helped by the disposal of the high-cost Scott area in 2014.”

    Premier UK managed to reduce operating costs from $35/boe to $29/boe.

    Despite restricted production for the first quarter of the year, Premier’s Huntington field’s facilities production uptime in the last four months exceeded 90%. The asset averaged 6.2kboepd for the first six months.

    The firm confirmed its Solan project was still in line for first production in the final quarter of this year.

    “Offshore productivity has improved markedly on our operated Solan project and we now have increased confidence around our targeted fourth quarter first oil date,” Welton said.

    “Development drilling and subsea installation work has commenced on schedule for our Catcher project. While progress in the construction of the FPSO hull has been slower than planned, our team, together with our FPSO contractor BW Offshore, are putting in place the appropriate mitigating actions. The project remains on track to come on-stream in 2017.”

    Heightened cost pressures had forced to industry to reset its price strategy, according to the company leader.

    “For our part, we have continued to capture sustainable savings in our operating costs, to defer discretionary capex and to actively manage our portfolio.

    “The weakness in the oil price post period-end serves as an important reminder that we must sustain these efforts. We remain focused on managing our balance sheet while achieving the highest level of operational and safety performance and maintaining optionality in the portfolio for future growth.”

    A “weakened” backlog of work for service firms has seen Premier reconsider development plans.

    Earlier this year, the firm delayed the submission of its development plan for its Norwegian Vette project. The firm has since re-engaged with the supply chain in a bid to drive costs down.

    Overall production for the firm averaged 60.4kboepd – a slight decrease on last year’s 64.9kboepd.

    Chief executive Tony Durrant added: “First half operating cash flows increased year-on-year driven by reliable production, our hedging programme and operating cost savings of 30%.

    “With Solan on-stream later this year and Catcher in 2017, we expect both growing production and reduced debt levels.

    Premier Oil has agreed to not pay dividends for two years under a renegotiation of agreements with banks and bondholders designed to increase its financial flexibility against a backdrop of sharply lower crude prices.

    The London-listed company, which has net debt of $2 billion and whose operations stretch from the Falkland Islands to Indonesia, had already scrapped dividend payments earlier this year after it slipped into the red on the back of a steep decline in oil prices.


    https://www.energyvoice.com/oilandgas/85513/premier-oils-cash-flow-up-as-industry-resets/

    http://www.reuters.com/article/2015/08/20/premieroil-results-idUSL5N10V18G20150820
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    PIRA: U.S. LNG projects could struggle to recover costs

    PIRA: U.S. LNG projects could struggle to recover costs

    PIRA Energy Group believes that the return of Japanese nuclear capacity, surging Asian LNG supply, and the weakness of crude prices does not bode well for Atlantic Basin flows to Asia.

    The broader compression of Asian spot prices at the high end against Henry Hub at the low end strongly implies shorter haul LNG trade and lower prices, PIRA said in its report.

    In the United States, despite sequentially faltering domestic production and robust electric generation gas burns, high absolute storage levels facing near-term gas balances continue to pose bearish price risks. As in 2012, the upcoming Bidweek cycle encompassing settlement of the September NYMEX contract looks especially prone to take the brunt of potentially bearish Henry Hub price fireworks.

    The next two weeks mark the lowest demand point of the year for European gas. Friday’s close below 40p/th for Sept. 2015 was the first in over a year and the bias remains to the downside in the weeks to come. PIRA does not believe in large amounts of downside risk on the prompt spot contracts, but it does see larger risks for the winter and summer strips ahead, which are more loosely tied to a falling ceiling on contract gas tied to lower oil prices.

    The North American natural gas supply curve continues to look flatter. PIRA still believes that there will be an uptick in price as the US passes through its demand surge and LNG and industrial projects start up, but the extent of the inflation adjusted run-up post-2020 has been reduced as the resource base expands and productivity improves.

    PIRA also sees an increasing concern that U.S. LNG projects will find it difficult to recover full costs plus a return in an increasingly competitive market.

    http://www.lngworldnews.com/pira-u-s-lng-projects-could-struggle-to-recover-costs/
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    EIA lowers crude oil price forecast through 2016

    EIA lowers crude oil price forecast through 2016



    Amid high uncertainty in the global oil market, EIA has lowered crude oil price forecasts in the Short-Term Energy Outlook (STEO), expecting West Texas Intermediate (WTI) crude oil prices to average $49 per barrel (b) in 2015 and $54/b in 2016, $6/b and $8/b lower than forecast in last month's STEO, respectively. Concerns over the pace of economic growth in emerging markets, continuing (albeit slowing) supply growth, increases in global liquids inventories, and the possibility of increasing volumes of Iranian crude oil entering the market contributed to the changed forecast.

    Since the beginning of 2015, North Sea Brent has traded about $5/b more than WTI, and EIA expects this $5/b price spread to persist at least through 2016. As gasoline prices tend to follow Brent crude oil prices, retail gasoline prices are expected to remain relatively low. EIA's updated projection remains subject to significant uncertainties: the pace and volume at which Iranian oil reenters the market, the strength of oil consumption growth, and the responsiveness of non-OPEC production to low oil prices.

    WTI futures contracts for November 2015 delivery, traded during the five-day period ending August 6, averaged $47/b. As detailed in the August Market Prices and Uncertainty Report, current values of futures and options contracts continue to suggest high uncertainty in the crude oil price outlook. These values established the lower and upper limits of the 95% confidence interval for the market's expectations of monthly average WTI prices in November 2015 at $34/b and $64/b, respectively. The 95% confidence interval for market expectations widens over time, with lower and upper limits of $27/b and $103/b for prices in December 2016. Implied volatility now averages 37%, more than double the implied volatility average this time last year (16%).

    http://www.oilvoice.com/n/EIA-lowers-crude-oil-price-forecast-through-2016/b5a78671bc65.aspx
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    Summary of Weekly Petroleum Data for the Week Ending August 14, 2015

    Summary of Weekly Petroleum Data for the Week Ending August 14, 2015

    U.S. crude oil refinery inputs averaged about 16.8 million barrels per day during the week ending August 14, 2015, 254,000 barrels per day less than the previous week’s average. Refineries operated at 95.1% of their operable capacity last week. Gasoline production increased slightly last week, averaging over 10.2 million barrels per day. Distillate fuel production decreased last week, averaging about 5.1 million barrels per day.

    U.S. crude oil imports averaged over 8.0 million barrels per day last week, up by 465,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.6 million barrels per day, 0.9% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 869,000 barrels per day. Distillate fuel imports averaged 201,000 barrels per day last week.

    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.6 million barrels from the previous week. At 456.2 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 2.7 million barrels last week, and are in the middle of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 0.6 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories rose 1.1 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 0.8 million barrels last week.

    Total products supplied over the last four-week period averaged 20.5 million barrels per day, up by 2.9% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.6 million barrels per day, up by 6.5% from the same period last year. Distillate fuel product supplied averaged over 3.7 million barrels per day over the last four weeks, down by 6.6% from the same period last year. Jet fuel product supplied is up 2.2% compared to the same four-week period last year.

    http://ir.eia.gov/wpsr/wpsrsummary.pdf

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    EIA Us domestic oil production

    EIA US domestic oil production


                                                             This week   Last week   Last year
    Domestic Production '000.................... 9,348          9,395        8,577

    http://ir.eia.gov/wpsr/overview.pdf

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    57% IRR at $40 Crude.

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    BHP goes bargain hunting at US Gulf sale

    BHP goes bargain hunting at US Gulf sale

    Anglo-Australian player BHP Billiton went bargain hunting at the latest US Gulf of Mexico lease sale, taking advantage of the industry downturn to swoop uncontested for more than two dozen deep-water blocks.

    http://www.upstreamonline.com/incoming/1409038/bhp-goes-bargain-hunting-at-us-gulf-sale?utm_source=twitterfeed&utm_medium=twitter

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    Marcellus/Utica Tied to $43.8B in New NE Industrial Projects

    Marcellus/Utica Tied to $43.8B in New NE Industrial Projects

    How much of an impact does Marcellus and Utica Shale drilling (and its associated activities) impact the northeast economically?

    We now have a pretty good idea, thanks to research done by Industrial Info Resources, a research company based in Sugarland, TX.

    Industrial Info is tracking more than $43.8 billion in industrial capital and maintenance projects that are set to kick off from now through 2016 in the Northeastern U.S. and New England. Industrial Info says, “Abundant natural gas from Marcellus Shale wells in Pennsylvania are responsible for much of the activity”

    http://marcellusdrilling.com/2015/08/marcellusutica-tied-to-43-8b-in-new-ne-industrial-projects/?utm_source=dlvr.it&utm_medium=twitter
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    Eagle Ford Economics

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    Oh boy, now the shales boyz have a new trick: low declines!

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    Alternative Energy

    China's solar manufacturing output tops $31 bln in H1 -ministry

    China's solar manufacturing output tops $31 bln in H1 -ministry

    The value of China's total solar photovoltaic (PV) manufacturing output topped $31 billion in the first half of 2015, the industry ministry said on Wednesday, as the push for renewable energy continues in the world's largest solar PV producer.

    In the first half of 2014, the total output value surpassed 150 billion yuan ($23.44 billion).

    China, the world's top greenhouse gas emitter, has committed to halting the rise in CO2 within the next 15 years to help build a United Nations climate deal in late 2015.

    Total output value surpassed 200 billion yuan ($31.26 billion) in the January-June period, the Ministry of Industry and Information Technology (MIIT) said in a statement on its website (www.miit.gov.cn).

    China also exported $7.7 billion worth of silicon wafers, batteries and modules in the first half of 2015, compared to $8.2 billion during the same period last year.

    It produced 74,000 tonnes of crystalline silicon, up 15.6 percent compared to the same period last year, and produced 4.5 billion silicon wafers, up slightly, the statement said.

    Domestic solar companies, some already heavily indebted, will need to raise many billions of dollars this year to fund a big expansion in capacity, a major test of investor confidence in a sector hit hard by the global financial crisis.

    China increased its domestic solar power capacity by 7.73 gigawatts (GW) in the first six months of 2015, the country's top energy regulator said in July, leaving new installations short of the half-way mark for this year's target as growth slowed in the second quarter.

    The government aims to raise the share of non-fossil fuels to 15 percent of its total energy mix by 2020 from around 11 percent at the end of 2014 as part of efforts to ease its dependence on coal and meet its climate pledges to the U.N.

    http://www.reuters.com/article/2015/08/19/china-solar-idUSL3N10U2HH20150819

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    US Wind Energy Selling At Record Low Price of 2.5 Cents per kWh

    US Wind Energy Selling At Record Low Price of 2.5 Cents per kWh

    Wind power prices have dropped down to an all-time low of just 2.5 cents per kWh, far below the average national average of around 11 cents per kWh, according to the DOE's 2014 ¨Wind Technologies Market Report.¨

    The all-time low is the weighted average of prices offered to utility buyers from projects negotiating contracts in 2014. The majority were located in the interior of the U.S., an area that includes states such as Oklahoma and Texas where wind-power potential is highest, Mark Bolinger, study co-author and Berkeley Lab Electricity Markets and Policy Group research scientist Mark Bolinger pointed out in an interview.

    "One important thing to note is that the majority of wind power development that has taken place in the last few years in the interior U.S. – you're not going to get those sorts of prices in the Northeast or other areas where wind power resources aren't as strong and projects are costlier to develop."

    Taller Turbines and Bigger Rotors

    2014's record-low wind power PPA prices resulted from a confluence of several factors, Bolinger continued. For one thing, the declining trend in wind power prices has continued since they hit a 2009 peak of around 7 cents per kWh.

    Ongoing technological advances were another contributor. ¨Taller turbines with larger rotors have resulted in higher average power capacities for wind turbine power capacities,¨ Bollinger said.

    "Wind energy prices — particularly in the central United States — have hit new lows, with utilities selecting wind as the low cost option," Berkeley Lab Senior Scientist and report co-author Ryan Wiser said. "Moreover, enabled by technology advancements, wind projects are economically viable in a growing number of locations throughout the U.S."

    Key findings from the latest "Wind Technologies Market Report" include:

    Wind power has comprised 33 percent of all new U.S. electric capacity additions since 2007, now meets almost 5 percent of the nation's electricity demand, more than 12 percent of total electricity generation in nine states and more than 20 percent in three states.

    In the last 15 years, the average nameplate capacity of wind turbines installed in the U.S. has increased by 172 percent, to 1.9 MW in 2014;  the average turbine hub height has increased by 48 percent (to 83 meters), and the average rotor diameter has increased by 108 percent (to 99 meters).
    Wind turbine prices have fallen 20 to 40 percent from their highs back in 2008, and these declines are pushing project-level costs down. Wind projects built in 2014 had an average installed cost of $1,710 per kW, down almost $600 per kW from the peak in 2009 and 2010.

    http://www.renewableenergyworld.com/articles/2015/08/us-wind-energy-selling-at-record-low-price-of-2-5-cents-per-kwh.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+RenewableEnergyNewsRssFeed+%28Renewable+Energy+News+RSS+Feed%29

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    Precious Metals

    Big diamonds--ok, small diamond death.

    Prices for Gem Diamonds Ltd.’s stones that are larger than 10 carats have fallen about 3 percent in the first half of this year, Chief Executive Officer Clifford Elphick said by phone on Wednesday. That compares with declines of about 30 percent for smaller gems.

    “The big stones seem to be holding up their value,” Elphick said.

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    Greece halts operations at Canada’s Eldorado Gold mine

    Greece halts operations at Canada’s Eldorado Gold mine

    Greece's authorities have temporarily suspended work at one of the mines run by Canada’s Eldorado Gold in northern Greece after determining the company had violated some terms.

    According to the country’s energy and environment minister, Hellenic Gold — a subsidiary of the Vancouver-based company— infringed the terms of technical studies. The revocation of those studies approvals, Panos Skourletis added, meant work in the gold-copper Skouries mine must stop for now, Agence France Presse reports. He didn't provide further details.

    The Skouries mine has had locals divided since early 2011, when the Vancouver-based firm’s subsidiary Hellenic Gold received government approval to mine in the northern peninsula.

    Some claim the mine, owned 95% by Eldorado, may hurt tourism and the environment, while others believe the operation is good news for Greece because it will generate new jobs and bring hundreds of millions into the struggling economy.

    Truth is Skouries was the flagship project of the last government’s foreign investment drive and, for many, remains a test case that would reveal whether Greece could protect foreign investors despite local opposition.

    Eldorado has invested more than $450 million since 2012 on construction and development of the Skouries and Olympias mines in Greece, and had planned to invest another $200 million this year to advance construction at Skouries.

    In April, one of Greece's top courts has handed a key victory to the Canadian gold miner, rejecting a decision that blocked Eldorado's plans to build a key processing plant at Skouries.

    http://www.mining.com/greece-halts-operations-at-canadas-eldorado-gold-mine/
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    Base Metals

    Glencore forecasts weak metals outlook

    Glencore forecasts weak metals outlook

    Glencore said tough market conditions, especially for aluminium and nickel, were hurting the business even though it had previously said the trading division would meet earnings targets whatever happened to commodity prices.

    "Glencore's high exposure to copper, whose prices are at their lowest since 2009, is a weakness. Also, the lower projected earnings of the company's trading arm, which is supposed to help the firm buck the commodities cycle, highlight the limits of its business model in this low-price environment," said Sebastien Marlier, commodities analyst at the Economist Intelligence Unit.

    "It's hard to predict what China is doing, as an industry we should not be increasing production in anticipation of China demand," Chief Executive Ivan Glasenberg told Reuters.

    "We will pull back our own production if necessary. Keep it in the ground, you can dig it out anytime."

    Formerly just a commodities trader, Glencore merged with mining company Xstrata in 2013. The marketing business was seen as a plus in diversifying earnings of the combined company as its success was not so closely tied to commodity prices.

    Glencore said first-half adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 29 percent to $4.6 billion, while earnings from its marketing division fell 27 percent to $1.2 billion.

    Chief Financial Officer Steve Kalmin said the company's cash flow was "comfortable" to service its debt, return cash to shareholders and support growth in copper and zinc production, where it was pursuing new opportunities.

    The price of copper, Glencore's largest earner, is at six-year lows weighed down by a slowdown in China, one of the world's biggest consumers of metals and other raw materials.

    "We are still looking for growth in both copper and zinc production in the second half of 2015 and then continuing in 2016," Kalmin told Reuters. "Those in particular are the two commodities that we see going forward fundamentally looking in much better shape than other commodities."

    Analysts had expected deeper cost cuts by Glencore to ease the strain on its debt levels and protect its credit rating.

    Coal prices, another major commodity for Glencore, also show no sign of recovering due to a supply glut.

    http://www.reuters.com/article/2015/08/19/glencore-results-idUSL5N10U0QW20150819
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    Copper breaks secular uptrend too.

    Image title
    Given its widespread use in manufacturing and construction coupled with the fact that China consumes 45% of the world's supply, copper has been bearing the brunt of this bearishness.

    Attached Files
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    China copper smelters seek higher concentrate fees on weak yuan

    China copper smelters seek higher concentrate fees on weak yuan
     
    Large copper smelters in China are seeking higher charges on imports of spot raw material concentrate after the yuan depreciated last week and because of low metal prices, people in the industry said.

    Higher requirement by Chinese smelters, top buyers of spot concentrate in the international market, has pushed up spot treatment and refining charges (TC/RC) about 10 per cent from last month. But the move could cut concentrates the smelters can buy from the international market.

    "The depreciation of yuan makes costs of concentrate imports higher," an executive at a large copper smelter said, who declined to be named due to the company's policy.

    TC/RC are paid by sellers of concentrate to Chinese smelters and then are deducted from the smelters' buying price based on metal prices on the London Metal Exchange. Charges rise when supply rises or demand falls as sellers compete for buyers. Higher charges increase margins at smelters. In early July, large smelters agreed to try not to take spot standard grade imports below TC/RC of $90 per tonne and 9 cents per pound for the third quarter.

    But traders said the smelters did not accept those levels this week. Smelters had bought spot concentrates with TC/RCs of about $92-$93 and 9.2-9.3 cents for delivery in the fourth quarter and were not keen to take deliveries for the current quarter.

    Global traders offered $80-$85 and 8-8.5 cents last month. The smelters were asking $94-$95 and 9.4-9.5 cents mostly, prompting some global traders to cut offers, said an executive at an international trading firm.

    Another reason why smelters ask higher TC/RC is low metal prices that have hovered around six-year lows since last month in the Chinese and international markets. "When metal prices were high and we made good profits, we could accept a lower TC/RC. But now we cannot afford it," the smelter executive said.

    Some smelters have already slowed production after low metal prices prompted suppliers of concentrates and scrap to cut spot sales in the domestic market, industry sources said. China's refined copper production dropped 4.5 per cent in July from June.

    http://en.chinamining.com.cn/News/2015-08-19/1439971119d73375.html
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    Steel, Iron Ore and Coal

    Chinese coal imports remain low during H1 2015

    Chinese coal imports remain low during H1 2015

    Image Source: WiredIt is reported that Chinese coal imports remained weak during H1 2015, when China imported 38% less coal (including lignite and anthracite) compared to H1 2014. Just under 100 million t of coal was imported.

    As such, India is expected to supersede China as the world’s largest importer of coal.

    Approximately 70% of China’s energy is generated by coal, but recently China has worked to implement more renewable energy sources, such as hydropower. Consequently, there has been a decline in the demand for coal in power generation.

    Mr Peter Sand, Chief Shipping Analyst at BIMCO, said that “Currently, overall dry bulk demand is the weakest since 2009 and freight rates gives ship owners few options but to endure. Diminishing volumes as well as dwindling sailing distances for total Chinese coal imports is a drag on the market.”

    China’s production of crude steel decreased to 410 million t during 1H15, 1.3% lower than 2014, and metallurgical coal imports decreased by 30% during 1H15 to 21.6 million t.

    Australian producers supply the majority of Chinese imports, 50%, but have recently faced competition from Mongolian exporters: metallurgical coal exports from Australia has decreased by 28% during 1H15, while the Mongolian exports decreased by 17%.

    Australia is one of the larger suppliers of thermal coal to China. Alongside Indonesia it accounts for 87% of thermal coal imports. Imports from South Africa, however, have ceased.

    Sands added “The eventual implementation of the free trade agreement between China and Australia will eliminate the tariffs currently imposed on Chinese coal imports. An increased coal trade between China and Australia will benefit seaborne trade as current alternative sources are closer to China and thus involve less transportation by sea. On the other hand, as it becomes more favourable for China to import coal from Australia, the chances of seeing beneficial longer-haul trades from, for instance South Africa, unfortunately become less likely.”

    http://steelguru.com/coal/chinese-coal-imports-remain-low-during-h1-2015/432403#tag

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    Coal prices hit 12-year low – npower’s daily market report.

    Coal prices hit 12-year low – npower’s daily market report.

    The price of coal is the lowest it has been in 12 years, according to npower’s daily market report.

    It is currently trading at $53.2 a tonne (£33/tonne).

    The weakness is due to an increase in supply and a reduction in demand from China and the US, the report claims.

    The UK gas system is well supplied again this morning due to high LNG flows. The linepack is currently forecast to close 6mcm long.

    Sarah Astley from npower’s optimisation desk said: “Langeled flows remain subdued at 18mcm with the unplanned outage at Troll gas field continuing however this is currently expected to be rectified by tomorrow.”

    LNG flows from South Hook remain high at 60mcm with four tankers expected to dock at the port next week.

    http://www.energylivenews.com/2015/08/19/coal-prices-hit-12-year-low-dmr/
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    China key steel mills daily output up 5.45pct in early-Aug

    China key steel mills daily output up 5.45pct in early-Aug

    Daily crude steel output of China's key steel mills witnessed an increase in early August after a fourth ten-day straight decrease, according to the latest data from the China Iron and Steel Association (CISA).

    China’s key steel producers produced 1.69 million tonnes of crude steel on average each day in August 1-10, up 5.45% from ten days ago.

    The CISA didn’t give an estimate on the nation’s daily output in early August.

    Stocks in key steel mills stood at 15.51 million tonnes by August 10, rising 2.58% from July 31 but down 5.31% from the month before, data showed.

    Additionally, key steel mills’ daily output of pig iron stood at 1.67 million tonnes during the same period, up 3.91% from end-July.

    Over August 1-10, five out of six major steel products in domestic market saw a rebound in prices, with rebar price averaging 2,199.7 yuan/t, rising 7.5% from ten days ago, showed data from the National Bureau of Statistics.

    From August 3 to 9, prices of domestic steel products saw a week-on-week rise of 1.3%, with rebar price up 2% from a week ago, showed data from the Ministry of Commerce.

    China’s steel prices may see upward strength in August due to tight supply amid continuous output cut of steel mills impacted by the upcoming military parade in capital Beijing.

    http://en.sxcoal.com/0/130107/DataShow.html
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