Mark Latham Commodity Equity Intelligence Service

Friday 16th October 2015
Background Stories on www.commodityintelligence.com

News and Views:

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    Macro

    Empire Fed Misses Again As New Orders Collapse To 5 Year Lows

    Image title
    After collapsing in August and unable to get up in September, October's Empire Fed bounced very modestly from -14.67 to -11.36 (but missed expectations for the 7th month of the last 8). This is the first time since 2009 that Empire Fed has printed below -10 3 months in a row putting The US firmly in recession territory, the underlying components were ugly with New orders crashing at the fastest pace since Nov 2010. Employees tumbled (as did inventories, although the plunge slowed) withprices received plumbing new cycle lows. In other words, total disaster... time to hike rates.Image title







     

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    EL Nino to aid nickel, bauxite, tin supplies; cut copper


    An El Nino weather pattern that is expected to be the strongest in nearly 20 years looks set to hit copper mining over the coming months, but should boost production of bauxite, nickel ore and tin in 2016, industry sources said.

    The weather phenomenon leads to hotter sea temperatures in the west Pacific Ocean, which means more rain falls on South America and less in Australia and South East Asia.

    A shorter monsoon in Indonesia the Philippines and Malaysia can help miners produce more tin, nickel and bauxite - key materials for the construction, transport and electronics industries.

    "Dry weather is a good time to mine, because most of our production is off-shore and also the weather is calmer," Agung Nugroho, corporate secretary at Indonesian tin producer, PT Timah told Reuters.

    Indonesia is the world's biggest exporter of the metal, which is seen in a balanced market this year. Production often dips due to heavy rains in December and January.

    In Malaysia, a shorter rainy season could boost bauxite production by anything between 10-20 percent, a geologist at a miner in Kuantan, in Pahang state, said. Malaysia is the second-biggest supplier to China of the ore used to make aluminium.

    Philippine nickel miners are also betting drier weather will let them mine until year end, while Australia's iron ore and coal exports are less likely to be disrupted by cyclones in the upcoming cyclone season.

    While a strong El Nino helps the minig of some metals, the opposite is true for copper as too little rain in Asia and too much in South America crimps supplies.

    Ok Tedi Mining's copper mine in Papua New Guinea has already been forced to shut after a drought cut off river transit links, while Freeport-McMoRan blamed El Nino as it cut its 2015 forecast for copper concentrate sales from Indonesia as less water impacted its milling operations.

    Meanwhile, mining operations in Chile, the world's top producer, remain vulnerable to disruption after heavy rains this year cut power and flooded mine shafts.

    http://www.reuters.com/article/2015/10/15/metals-lmeweek-el-nino-idUSL8N12E07R20151015

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    BHP debt pricing follows CDS market: Glencore, traders read through is nasty.


    Diversified major BHP Billiton has priced $3.25-billion of hybrid notes in the US dollar market, a further €2-billion of subordinated fixed-rate reset notes in the euro market and £600-million of subordinated fixed-rate reset notes in the sterling market. 

    The US dollar priced notes would be issued in two tranches, with settlement to occur on September 19, subject to the customary closing conditions. The euro notes would also be issued in two tranches, while the sterling notes would be issued separately on October 22. 

    The proceeds from the placements would be used for general corporate purposes, which BHP said could include a repayment of the company’s existing debt.

    It is our preference that if you wish to share this article with others you should please use the following link:

    http://www.miningweekly.com/article/bhp-prices-notes-to-stave-off-debt-2015-10-15

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    VW to recall 8.5m vehicles in Europe


    German auto giant Volkswagen says it will recall a total of 8.5 million diesel vehicles Europe-wide that are equipped with sophisticated software enabling their engines to cheat pollution tests.

    Responding to an order from the German KBA federal transport authority earlier to recall 2.4 million vehicles in Germany alone, VW announced in a statement that around 8.5 million vehicles would be recalled in all 28 of the European Union's member states, starting from January 2016.

    For countries outside the EU, it would have to be established in detail exactly which vehicles were affected, the statement added.

    "Volkswagen will be pro-active in approaching and informing customers," the carmaker said.

    Already from the beginning of October, every VW customer had been able to use the company's website to check whether their vehicle was affected, simply by typing in the car's number.

    A similar function was also available on the websites of the company's other brands of Audi, SEAT and Skoda.

    "Rectifications of the vehicles will begin from January 2016 and will be free of charge for our customers," VW said.

    The solutions could involve both software and hardware measures.

    Until the changes could be undertaken, "every vehicle remains technically safe to drive," VW insisted.

    Earlier, the German authorities tightened the screws on the embattled carmaker, saying it would oversee the large-scale recall across the country.

    "We are going to issue the order" to recall 2.4 million vehicles, a spokesman for the KBA or federal transport authority told AFP.

    And to make sure that order is carried out, the KBA would oversee the operation, he added.

    http://www.businessspectator.com.au/news/2015/10/16/automotive/vw-recall-85m-vehicles-europe
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    Oil and Gas

    Russia says deliberate oil output cuts will not support prices


    Russian Deputy Energy Minister Anatoly Yanovsky said on Thursday that a deliberate oil production decrease by the country would not support prices, responding to calls to reduce output.

    His comments indicated that Russia was still unwilling to cut oil output as it argued that its oil wells, located mostly in harsh climate of Siberia, will not be easy to restart once they are mothballed.

    Some leading oil producers, notably Venezuela, have called on Moscow to cut oil output in order to support prices, which have more than halved since peaking out in June 2014.

    "I don't think that some artificial production cuts will have a significant impact on (price) change," Yanovsky said.

    Russia is also reluctant to decrease extraction of oil as its rivalry for global market share with the world's other leading producer of crude, Saudi Arabia, has heated up after supplies of Middle Eastern oil have increased in eastern Europe, Moscow's traditional market.

    Yanovsky's comments, made just before next week's meeting of Russia and other non-OPEC envoys with the officials from the Organization of the Petroleum Exporting Countries, have pushed the price of oil down.

    http://www.reuters.com/article/2015/10/15/russia-oil-cuts-idUSL8N12F3JY20151015
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    First GLNG cargo delivered to South Korea?


    The first cargo of liquefied natural gas from the Santos-operated US$18.5 billion GLNG project in Australia has been delivered to South Korea’s Kogas, according to a report by Reuters.

    The news agency cited Total’s CEO Patrick Pouyanne as saying this on Thursday without revealing any further information.

    However, the MISC-operated 152,300 cbm Seri Bakti which arrived on September 28 at the GLNG plant to pick up the first cargo destined for Kogas is still docked at the terminal’s jetty, shipping data shows.

    Santos did not respond to an email by LNG World News seeking comment regarding the matter by the time this article was published.

    The 7.8 mtpa LNG plant on Curtis Island off Gladstone started producing the chilled gas from Train 1 in September. The second train is expected to be ready for start-up by the end of the year.

    Australia’s Santos has a 30% interest in GLNG. Other co-venturers include Petronas (27.5%), Total (27.5%) and Kogas (15%).

    http://www.lngworldnews.com/report-first-glng-cargo-delivered-to-south-korea/

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    Gate LNG’s throughput almost doubles in first nine months


    The Gate LNG import terminal in Rotterdam was quite busy in the January-September period with the LNG throughput almost doubling.

    Overall, LNG throughput (incoming and outgoing) at the terminal was 1.75 million metric tons in the mentioned period, a rise of 84 percent compared to 2014, according to data released by the Port of Rotterdam.

    Gate is handling about one liquefied natural gas carrier per week since 38 ships called at the first Dutch LNG terminal during the first nine months of this year.

    Out of that, there were “16 unloads, 11 large reloads and 11 small reloads,” by the end of September, Stefaan Adriaens, Commercial Manager of the Gate terminal told recently to LNG World News

    http://www.lngworldnews.com/gate-lngs-throughput-almost-doubles-in-first-nine-months/

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    Sevan Marine: corporate investigation report handed over to Norwegian authorities


    Sevan Has decided to hand investigation report over to the Norwegian authority for investigation and prosecution of economic and environmental crime

    Based on Brazilian press articles indicating irregularities involving Sevan in the period 2005-2008, board initiated independent corporate investigation by Advokatfirmaet Selmer DA (Selmer)

    Selmer's main conclusion is that it is more likely than not, that illegal conduct in the form of improper payments to obtain business occurred when Petrobras awarded contracts to Sevan in 2005-2008 regarding Sevan Piranema, Sevan Driller and Sevan Brasil

    Board of Directors is assessing further actions and implications of the findings contained in the investigation.

    http://uk.reuters.com/article/2015/10/16/idUKFWN12F04720151016
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    Canacol Energy announces results of Clarinete 2ST well test


    Canacol Energy Ltd. is pleased to announce that Clarinete 2ST, the first appraisal well drilled in its recently discovered Clarinete gas field on the VIM 5 Exploration and Production Contract, has tested at a final gross rate of 25.6 million standard cubic feet per day (4,491 barrels of oil equivalent) of dry gas with no water from the Cienaga de Oro reservoir, and at a final gross rate of 4.7 mmscfpd (825 boepd) of dry gas with 1 barrel of water from the overlying Tubara sandstone reservoir. Canacol, through its wholly owned subsidiary CNE Oil & Gas S.A.S., holds a 100% operated interest in the VIM 5 E&P contract.

    The Clarinete-2 well was spud on August 2, 2015, and had to be sidetracked on August 31, 2015 after becoming mechanically stuck in the shallow Porquero shales at a depth of approximately 4,300 feet, not having reached the primary Cienaga de Oro reservoir target at 5,967 feet. The Clarinete-2 ST reached total depth of 7,842 feet on September 16, 2015. The well encountered 127 feet of total net gas pay with an average porosity of 23% within the same two main reservoir intervals of the Cienaga de Oro sandstone that tested a combined rate of approximately 44 mmscfpd in the Clarinete-1 discovery well.

    http://www.oilvoice.com/n/Canacol-Energy-announces-results-of-Clarinete-2ST-well-test/486a00481a29.aspx
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    Summary of Weekly Petroleum Data for the Week Ending October 9, 2015


    U.S. crude oil refinery inputs averaged about 15.3 million barrels per day during the week ending October 9, 2015, 292,000 barrels per day less than the previous week’s average. Refineries operated at 86.0% of their operable capacity last week. Gasoline production increased last week, averaging over 9.6 million barrels per day. Distillate fuel production decreased last week, averaging over 4.6 million barrels per day.

    U.S. crude oil imports averaged over 7.3 million barrels per day last week, up by 247,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.3 million barrels per day, 1.7% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 719,000 barrels per day. Distillate fuel imports averaged 130,000 barrels per day last week.

    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.6 million barrels from the previous week. At 468.6 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 2.6 million barrels last week, but are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 1.5 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories rose 1.8 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 3.3 million barrels last week.

    Total products supplied over the last four-week period averaged over 19.5 million barrels per day, up by 1.2% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.1 million barrels per day, up by 3.4% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per day over the last four weeks, up by 5.4% from the same period last year. Jet fuel product supplied is up 5.5% compared to the same four-week period last year.

    http://ir.eia.gov/wpsr/wpsrsummary.pdf
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    US Domestic oil production continues falling


                                         Last Week       Week Ago         Last Year

    Domestic Production....... 9,096                9,172               8,951

    http://ir.eia.gov/wpsr/overview.pdf
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    U.S., Alaska end quest for damages against Exxon over 1989 spill


    U.S. and Alaskan authorities have ended their efforts to seek additional damages from Exxon Mobil Corp over the 1989 Exxon Valdez oil spill and the subsequent settlement, the Department of Justice said on Thursday.

    The department said in a statement that it is "bringing to a close the federal and state judicial actions" against the company and opting not to recover more damages under the reopener provision of the 1991 settlement following the spill.

    Alaska Attorney General Craig Richards said in the statement that although officials were not pursuing the additional damages, authorities will consider alternatives for dealing with lingering oil sites.

    http://www.reuters.com/article/2015/10/15/exxon-mobil-alaska-valdezspill-idUSL1N12F0RN20151015
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    Schlumberger: market recovery to take longer, hints at more cost cuts


    Schlumberger Ltd, the world's No.1 oilfield services provider, suggested that it may have to reduce costs further and cut more jobs as it expects any rebound in drilling activity to now take longer than expected.

    Even if crude prices improve next year, weak cash flows would curtail the ability of oil and gas companies to increase spending on exploration and production, Schlumberger Chief Executive Paal Kibsgaard said in a statement.

    "In light of conservative customer budgets for next year, we are therefore entering another period during which we will continually adjust resources in line with activity," Kibsgaard said on Thursday.

    Kibsgaard said the oil market is also weighed down by concerns of slowing Chinese demand and additional supply from Iran.

    Schlumberger said spending cuts by companies have been "dramatic", but it did not say how much it expects oil and gas companies to cut spending in North America and internationally - a forecast it issued in the previous two quarters.

    Its last forecast, issued in July, was for a drop in spending of more than 35 percent in North America and more than 15 percent outside the region.

    "They know that the next two quarters are going to be very choppy and very tough so they want to make sure they are aligned for that," Evercore ISI analyst James West said.

    "When they said they are going to manage their operations, it's a good indication that headcount reductions will continue."

    Schlumberger kicks off the earnings for oilfield services providers and its comments are closely watched for a glimpse into industry trends.

    Schlumberger has already cut 20,000 jobs this year and scaled back spending in response to weak crude prices, moves that helped its third-quarter profit marginally beat analysts' average estimate.

    Net income attributable to Schlumberger nearly halved to $989 million, or 78 cents per share.

    Total revenue fell 33 percent to $8.47 billion, including a 47 percent drop in North America and an about 27 percent decline outside.

    Analysts were expecting a profit of 77 cents per share, according to Thomson Reuters I/B/E/S.

    Schlumberger said in August it would buy equipment maker Cameron International Corp for $14.8 billion to bolster its pricing capability, and on Thursday said it would seek more acquisitions.

    http://www.reuters.com/article/2015/10/15/schlumberger-results-idUSL3N12F5X820151015

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    Occidental to exit North Dakota's oil fields in sale to private equity fund


    Occidental Petroleum Corp, the fourth-largest U.S. oil producer, has agreed to sell all of its North Dakota shale oil acreage and assets to private equity fund Lime Rock Resources in a deal worth around $500 million, according to sources familiar with the matter.

    The sale, which marks the first exit of this downturn by a major oil company from the Bakken shale formation, encompasses all of Oxy's more than 300,000 acres in the state, including a 21,000 square-foot regional office built just three years ago.

    Lime Rock, which already operates in North Dakota, is buying the assets as the oil industry contends with the worst crude price crash in more than six years, a drop the fund used to its advantage.

    As recently as last fall, Wall Street had expected Oxy's Bakken assets to sell for more than $3 billion. The sharp drop in the deal's value represents the most-significant pullback in valuation yet in the second-largest U.S. oil producing state.

    Lime Rock is requiring all of Oxy's North Dakota employees to re-apply for their jobs, according to one of the sources.

    Lime Rock and Oxy, both of which are based in Houston, declined to comment.

    http://www.reuters.com/article/2015/10/15/limerock-occidental-bakken-idUSL1N12F2WM20151015
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    Carrizo Oil & Gas Announces Estimated Third Quarter Production and share sale


    Estimated third quarter crude oil production of 23,573 Bbls/d, 4% above the high-end of the guidance range
    Raising 2015 crude oil production growth target to 21%
    Added 8,000 Bbls/d of swaps for 2016 at a weighted average price of approximately $60/Bbl

    Production volumes during the third quarter of 2015 are estimated to be 35,948 Boe/d. This represents an increase of 7% versus the third quarter of 2014 and exceeds the high-end of the Company's guidance range of 33,133-34,300 Boe/d. Oil production during the third quarter of 2015 is estimated to be 23,573 Bbls/d, an increase of 18% versus the third quarter of 2014; natural gas and NGL production are estimated at 51,710 Mcf/d and 3,757 Bbls/d, respectively, for the third quarter of 2015.

    Given the continued strong performance from the Company's primary operating areas, Carrizo is increasing its 2015 oil production guidance to 22,750-22,850 Bbls/d from 22,350-22,500 Bbls/d. Using the midpoint of this range, the Company's 2015 oil production growth guidance increases to 21% from 19% previously. For natural gas and NGLs, the Company is increasing its 2015 guidance to 56-57 MMcf/d and 3,500-3,600 Bbls/d, respectively, from 54-56 MMcf/d and 3,250-3,350 Bbls/d.

    Since June 30, 2015, the Company has added additional crude oil hedges covering calendar 2016 volumes. For 2016, Carrizo now has hedges covering approximately 13,500 Bbls/d of crude oil (comprised of 8,000 Bbls/d of swaps at an average price of $60.03/Bbl and 5,492 Bbls/d of collars with a weighted average floor price of $50.97/Bbl and a weighted average ceiling price of $74.73/Bbl). Additionally, Carrizo will continue to get the benefit from the offsetting hedge transactions it entered into during the first quarter of 2015; these transactions locked in an additional $44.8 million of cash flow that will be realized during 2016.

    http://www.thestreet.com/story/13326343/1/carrizo-oil-gas-announces-estimated-third-quarter-production-and-raises-2015-crude-oil-production-growth-target.html

    Carrizo Oil & Gas, Inc.announced today that it has priced an underwritten public offering of 5,500,000 shares of its common stock, which was upsized from the previously announced offering of 5,300,000 shares. Carrizo has granted the underwriters an option to purchase up to 825,000 additional shares. The total gross proceeds of the offering (before underwriters' discounts and commissions and estimated offering expenses) will be approximately $211.8 million. Carrizo intends to use the net proceeds from this offering, and any proceeds from the exercise of the underwriters' option to purchase additional shares, to repay borrowings under its revolving credit facility, with the remainder for general corporate purposes, including future potential acquisitions with a primary focus in the Permian Basin.

    http://finance.yahoo.com/news/carrizo-oil-gas-prices-upsized-023000284.html
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    Alternative Energy

    German 2016 green power surcharge at 6.354 cents/kWh -grid firms


    A surcharge levied on German consumers to support renewable power will rise 3 percent next year, despite government efforts to scale back support for green power, a statement from the country's network operators (TSOs) showed on Thursday.

    The surcharge under the renewable energy act (EEG) will be 6.354 euro cents per kilowatt hour (kWh), up from 6.170 cents this year, it said.

    Sources told Reuters last week that the fee, which is added to consumers' bills, would rise by this amount and a leading green energy group had also anticipated higher costs.

    It had fallen this year for the first time since it was introduced in 2000.

    The fee represents the biggest single item to finance Germany's "Energiewende" policy, amounting to a total 22.3 billion euros ($25.49 billion) in 2014, according to the TSOs.

    Its growing size has created concern, leading to reforms to the system of rewarding green energy with above-market payments last year. These curbed incentives and set caps on green energy expansion, also mandating that it must be better integrated into the wholesale electricity market.

    The TSOs, which are supervised by the energy regulator, the Bundesnetzagentur, cited the following factors:

    Germany is adding more wind power capacity both offshore and onshore as well as biomass, which means more money is paid out under the EEG act..

    Also, the gap between guaranteed EEG prices and wholesale market prices obtained by mainly thermal power plants on energy bourse EEX has risen because prices have fallen sharply amid a fuels markets slump. They are currently at 12-year lows.

    The EEG provides for the difference between EEG support and market prices to help young technologies such as wind turbines and solar panels compete with conventional energy.

    The real eventual cost of the surcharge depends on weather patterns -- which rule how much renewable energy is produced and entitled to support from the EEG account only once it is fed into the grid.

    A household using 3,500 kWh per year would have to pay 222.39 euros towards the EEG alone in 2016, 3 percent more than this year, retail portal Toptarif said.

    http://www.reuters.com/article/2015/10/15/germany-energy-renewables-idUSL8N12F1HY20151015

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    Biomethane plant in the UK inaugurated


    Sun Wind energy reported that the German company Agraferm Technologies AG (link is external) starts building its tenth biomethane plant in the United Kingdom. Overall, Agraferm has received three contracts for new biogas plants.

    While the project in Metheringham will produce biomethane, two other projects in Methwold and Crowland will produce biogas from a flexible substrate mix.

    Additionally, those two plants will use a cogeneration unit to produce electricity.

    The biomethane plant in Metheringham will consist of one digestor and post digestor, yield 400 m³ per hour and will have an electric capacity of 500 kW. As Heinrich Schulze Herking, Chief Technology Officer at Agraferm explains, plants in this performance class usually require three to four tanks but thanks to high-load fermentation, the new plant will require substantially less tank volume.

    The second project is situated in Crowland on Decoy Farm, right next to a compost facility run by Material Change Ltd., who manages construction and operation of the Crowland plant. The CHP plant being constructed there will use a mix of energy crops and waste material and will have a capacity of 2.8 MWel.

    The third order comes from Future Biogas Ltd. for a plant in Methwold, which will also use an individual concept with a flexible substrate mix.

    Yearly, about 50,000 tons of substrate will be fermented in the plant. Due to upstream milling, two digestors and one post digestor, more than half of the raw material for the plant will come from pig dung. Like Metheringham, the output of the plant will be around 400 m³/hour and it will supply a 500 kW CHP plant.

    Meanwhile, all three plants are scheduled for completion in 2015. Including them, Agraferm will have 20 biogas plants in the UK providing a raw biogas volume of approximately 200 million m³ per year.

    http://steelguru.com/power/biomethane-plant-in-the-uk-inaugurated/436865#tag

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    Breakthrough could lead to cheaper, cleaner solar cells - Report


    Solar Daily reported that the researchers have worked on developing iron-based solar cell dyes for three years and are surprised by how quickly they found a dye that can capture sunlight as efficiently as this.

    The hope is to develop efficient and environmentally friendly solar energy applications. Solar energy is an inexhaustible resource that we currently only utilise to a very limited extent. Researchers around the world are therefore trying to find new and more efficient ways to use the energy in sunlight.

    The technique the researchers in Lund are working on is solar cells consisting of a thin film of nanostructured titanium dioxide and a dye that captures solar energy.

    Today, the best solar cells of this type use dyes containing ruthenium metal - a very rare and expensive element.

    Mr Villy Sundstrom, Professor of Chemical Physics at Lund University, said that "Many researchers have tried to replace ruthenium with iron, but without success. All previous attempts have resulted in molecules that convert light energy into heat instead of electrons, which is required for solar cells to generate electricity."

    Researchers at the Chemistry Department in Lund, in collaboration with Uppsala University, have now successfully produced an iron-based dye that is capable of converting light into electrons with nearly 100 per cent efficiency.

    Mr Kenneth Warnmark, Professor of Organic Chemistry at Lund University, said that "The advantage of using iron is that it is a common element in nature. It can provide inexpensive and environmentally friendly applications of solar energy in the future."

    By combining the experiments with advanced computer simulations, the researchers are able to understand in detail required design concepts for the iron molecules to work. This knowledge is now being used for further developing the iron-based dyes. More research is needed before the new solar cell dye can be used in practice, but there are high hopes.

    Mr Villy Sundstrom said that "The results of the study suggest that solar cells based on these materials can be at least as effective as those of today that are based on ruthenium or other rare metals."

    The discovery could also advance research on solar fuels in which, like in photosynthesis of plants, water and carbon dioxide are turned into energy-rich molecules - solar fuel - with the help of sunlight.

    Mr Kenneth Warnmark said htat "We envision that the new iron-based molecules could also drive the chemical reactions that create solar fuel."

    http://steelguru.com/power/breakthrough-could-lead-to-cheaper-cleaner-solar-cells-report/436858#tag

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    Galaxy Resources Ltd. says prices for lithium carbonate in China have risen


    Lithium producer Galaxy Resources Ltd said prices for both technical and battery grade lithium carbonate in China have risen significantly on the back of tight demand and supply fundamentals, with current prices up almost 17% on the same time last year.

    Chinese lithium carbonate producers have lifted domestic lithium carbonate prices, and the uncontracted spot price for battery grade lithium carbonate in China has hit levels of up to RMB 45,000/tonne, or approximately US$7,000/tonne, in recent months.

    The Company also reports that technical grade lithium carbonate prices have followed the same trend with uncontracted spot prices up to RMB 40,000/tonne or approximately US$6,250/tonne.

    The price increases in China follow the increases in global lithium product prices, including lithium carbonate, announced by major producers Rockwood Lithium and FMC Lithium this year.

    http://www.indmin.com/Article/3497857/Chinese-lithium-prices-take-cue-from-FMC-increase.html
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    Agriculture

    Syngenta sales fall 12 pct on Brazil weakness


    Third-quarter sales at Swiss agricultural chemicals group Syngenta AG fell by more than expected as the weak currency in Brazil, its second-largest market, eroded the value of overseas business.

    The company is under pressure to boost shareholder returns after fending off a $47 billion takeover approach from U.S. seeds rival Monsanto in August.

    Sales fell 12 percent to $2.62 billion, whereas analysts polled by Reuters had on average expected only a 5 percent decline to $2.82 billion.

    "Sharp depreciation of the (Brazilian) real in the quarter created major market disruptions. Because of its suddenness we were not immediately able to increase prices to compensate," finance chief John Ramsay told analysts in a conference call.

    The company planned to push up prices in Latin America, he added.

    Syngenta said its earnings before interest, tax, depreciation and amortisation (EBITDA) would fall by a figure of around 5 percent this year because of currency effects.

    Brazil's real hit an all-time low in September amid a political crisis coupled with an economy in recession, which has also proved a headache for rivals.

    The shares dropped 2.7 percent to a more than nine-month low, amid rising scepticism about the group's medium-term profitability and sales targets.

    "The expected growth from 2016 is fraught with uncertainty because of potentially longer-lasting market weakness," Zuercher Kantonalbank analysts said.

    Rival DuPont this month cut its full-year operating profit forecast by 11 percent, citing weak pesticides and seeds demand in Brazil.

    Also this month, Monsanto said it expected low prices for agricultural produce to squeeze results well into 2016 and unveiled plans to cut 2,600 jobs.

    Latin America typically accounts for about 45 percent of Syngenta's total sales in the second half.

    Brazil, which is a big producer of soybeans, sugarcane and maize, was Syngenta's second-most important market in 2014, generating 19 percent of sales.

    In Brazil, low commodity prices weighed on pesticides and seeds markets, as did the sharp currency depreciation and tight credit conditions for farmers, the Swiss company said.

    The company maintained its 2015 target of an improvement in its EBITDA margin from 19.3 percent last year, helped by cost cutting efforts.

    It will also get a boost from a $200 million upfront payment from selling some rights to genetically modified corn traits to Germany's KWS and France's Limagrain.

    As part of an expansion of its licensing collaboration with the two companies and their joint ventures AgReliant and Genective, Syngenta also stands to receive future royalty and milestone payments over 20 years.

    Syngenta last month unveiled plans to buy back more than $2 billion of stock to boost shareholder returns after rejecting Monsanto's takeover approach, and is putting its vegetable seeds business on the block to fund the measure.

    http://www.reuters.com/article/2015/10/15/syngenta-results-idUSL8N12F0CS20151015
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    U.S. lawsuits build against Monsanto over alleged Roundup cancer link


    Personal injury law firms around the United States are lining up plaintiffs for what they say could be "mass tort" actions against agrichemical giant Monsanto Co that claim the company's Roundup herbicide has caused cancer in farm workers and others exposed to the chemical.

    The latest lawsuit was filed Wednesday in Delaware Superior Court by three law firms representing three plaintiffs.

    The lawsuit is similar to others filed last month in New York and California accusing Monsanto of long knowing that the main ingredient in Roundup, glyphosate, was hazardous to human health. Monsanto "led a prolonged campaign of misinformation to convince government agencies, farmers and the general population that Roundup was safe," the lawsuit states.

    The litigation follows the World Health Organization's declaration in March that there was sufficient evidence to classify glyphosate as "probably carcinogenic to humans."

    "We can prove that Monsanto knew about the dangers of glyphosate," said Michael McDivitt, whose Colorado-based law firm is putting together cases for 50 individuals. "There are a lot of studies showing glyphosate causes these cancers."

    "Glyphosate is not a carcinogen," company spokeswoman Charla Lord said in an emailed statement. "The most extensive worldwide human health databases ever compiled on an agricultural product contradict the claims in the suits."

    Roundup is used by farmers, homeowners and others around the globe and brought Monsanto $4.8 billion in revenue in its fiscal 2015. But questions about Roundup's safety have dogged the company for years.

    Attorneys who have filed or are eying litigation cited strong evidence that links glyphosate to non-Hodgkin lymphoma (NHL). They said claims will likely be pursued collaboratively as mass tort actions.

    At least 700 lawsuits against Monsanto or Monsanto-related entities are pending, brought by law firms on behalf of people who claim their non-Hodgkin lymphoma was caused by exposure to PCBs that the company had manufactured until the late 1970s.

    http://www.reuters.com/article/2015/10/15/usa-monsanto-lawsuits-idUSL1N12E18J20151015
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    Base Metals

    Anglo-Glencore Collahuasi copper mine postpones expansion plan


    Chile's second-biggest copper mine Collahuasi, owned by Anglo American and Glencore has postponed expansion plans, on top of its previously announced cuts, as it faces a six-year low in the price of the base metal. 

    On September 29, Collahuasi had said it was planning to cut output by 30 000 t, alongside dozens of jobs, because of difficult market conditions. But a letter addressed to workers that same day, seen by Reuters on Wednesday, added that its growth project would also be delayed. "The growth project has been postponed and operations at our company will be reduced," the letter said. 

    Collahuasi has been mulling expansion plans to double the mine's annual production to around one-million tonnes for some time, a plan originally slated to cost some $6.5-billion. 

    Metals companies globally have been cutting back on production and freezing expansion plans as a cooling Chinese economy has darkened the outlook for a quick recovery in the copper price. Collahuasi could not immediately be reached for comment on Wednesday.

    http://www.miningweekly.com/article/anglo-glencore-collahuasi-copper-mine-postpones-expansion-plan-2015-10-14
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    Steel, Iron Ore and Coal

    Coal prices keep dropping as Asian demand ebbs


    Image Source: wikimediaReuters reported that coal markets continued to test new lows over the past week, with both physical and futures prices falling further as demand wanes along with Asia's slowing economies.

    China, the world's biggest coal user, producer and importer, bought 17.77 million tonnes of coal overseas in September, down 16 percent from a year ago, with weak demand and a domestic supply glut continuing to weigh on shipments.

    Imports over the first nine months fell 29.8 percent to 156.36 million tonnes, with foreign suppliers struggling to compete in a massively oversupplied market.

    India, another huge coal consumer and importer, has also started to order less shipments as its domestic output has begun improving following years of falling behind target.

    As a result, cargo prices for Australian coal from its Newcastle terminal which largely supply China, and shipments from South Africa's Richards Bay, which ships much of its coal to India, have become around a third cheaper since their 2015 peaks, last settling at USD 53.60 and USD 49.55 a tonne respectively, and both are now below their 2008-2009 global financial crisis lows.

    One coal trader said that "The situation in Asia for coal sellers is pretty bad. It's been bad for a while, but I still can't see any sign of a fundamental improvement until something on the supply side really budges in the form of a major reduction or closure."

    European physical coal cargo prices for delivery into its main terminals at Amsterdam, Rotterdam or Antwerp (ARA) are also down sharply this year, shedding over 20 percent from their 2015 peaks to a last settlement of USD 51.70 a tonne.

    http://steelguru.com/coal/coal-prices-keep-dropping-as-asian-demand-ebbs/436855#tag
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    China coastal coal freight rates further drop


    Freight rates for vessels shipping coal from northern China to the south further dropped in October amid subduing shipment demand from downstream sectors.

    The shipping rate for vessels of 50,000-60,000 DWT from Qinhuangdao to Guangzhou port stood at 18.1 yuan/t on October 15, down 0.1 yuan/t on day and down 0.6 yuan/t from a week ago, according to the data from the Shanghai Shipping Exchange.

    The rate for smaller vessels of 15,000-20,000 DWT from Qinhuangdao to Ningbo port in eastern China's Zhejiang province was 21 yuan/t on the same day, unchanged on day but down 0.6 yuan/t on week.

    The rate for 30,000-40,000 DWT vessels to ship coal from Huanghua to Shanghai port stood at 17.6 yuan/t on the same day, unchanged on day but down 0.4 yuan/t on week.

    The sluggishness in coastal coal shipping market was mainly attributed to the decreasing coal consumption from downstream utilities amid cooler weather, and was also impacted by slack industrial activities during the National Day holidays.


    Daily coal consumption at power plants under the six coastal utilities stood at 0.46 million tonnes on October 15, down 2.3% from a week ago; while their coal stocks totaled 13.37 million tonnes on the same day, which was enough to cover 28.8 days of consumption.

    The volume of coal shipped out of Qinhuangdao port fell 25.76% on week to 0.49 million tonnes on average each day over the week ended October 15.

    Market sources said most ship owners had to resume shipping to pay for bank debt, despite the great losses it cost. The coastal coal shipping market may continue to see a downward trend in the remaining days of October, but the decrease may be slower.

    http://en.sxcoal.com/0/133018/DataShow.html

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    Rio Tinto lifts iron ore shipments despite China risks, draws on inventory


    Rio Tinto on Friday posted a 17 percent rise in third-quarter iron ore shipments and said it was on track to meet a full-year target of 340 million tonnes, shrugging off risks from slower economic growth and peaking steel output in China.

    In a sign market conditions may be improving, the miner dipped into its inventories - 4 million tonnes from its Australian operations and 1 million from the Canadian business - after production fell short of shipments.

    Rio Tinto shipped 91.3 million tonnes over the quarter, outstripping production of 86.1 million tonnes, data from the company's quarterly production report showed.

    "Clearly, the iron ore market is reasonably tight," said Shaw Stockbroking mining analyst Peter O'Connor in a note to clients.

    At Rio Tinto's forecast shipping rate, the Anglo-Australian miner would maintain a steady ranking with Vale of Brazil, while ahead of BHP Billiton .

    "Companies such as Rio Tinto are making a lot of money out of iron ore because they can produce so much, so you would expect production to keep going up," MineLife analyst Gavin Wendt said.

    A global glut of ore and falling Chinese steel demand have dragged iron ore prices down sharply from a high of nearly $200 in 2011. The price is forecast to drop to $50 over the next two years, a Reuters poll showed.

    Iron ore miners have been on a drive to lower their iron ore production costs to close to $10-$15 a tonne to keep ahead of the deterioration in pricing.

    Nev Power, chief executive of Australian iron ore miner Fortescue Metals Group on Thursday said the market for the steel-making commodity had returned to relative balance, following the exit of some higher cost producers who found the business unprofitable.

    Rio Tinto iron ore division head Andrew Harding last month forecast some 120 million tonnes of unprofitable iron ore would dry up in 2015 - 45 million in China and the rest mostly from mines in West Africa.

    Iron ore stood at $53.20 per tonne on Friday, just above the $50 average over 2016 and 2017, according to a median forecast of 17 analysts polled by Reuters late last month.

    Rio Tinto's iron ore production had taken a blow in the first half of the year after interruptions due to two cyclones hit near its Australian mines, forcing it to revise earlier guidance down by 10 million tonnes this year.

    http://www.reuters.com/article/2015/10/16/rio-tinto-output-idUSL3N12F69I20151016
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