Mark Latham Commodity Equity Intelligence Service

Monday 27th March 2017
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    Macro

    India opens regulatory 'back door' for projects flouting environment law


    The Indian government is giving industrial projects a chance to clear regulatory hurdles they had previously failed to do, in a move analysts say legitimizes projects destroying forests and water sources, and hurting communities dependent on them.

    India's environment ministry last week offered industries that had not previously obtained environmental clearance a period of six months to become compliant with the law, rather than leave them "unregulated and unchecked".

    This gives violating industries a free pass, allowing them to bypass safeguards and public hearings otherwise required for such a clearance, said Kanchi Kohli, an analyst at the Centre for Policy Research in New Delhi.

    "These violations have caused large-scale public harm," she said, adding that the ministry opening a "back door" for those who do not comply sets a bad precedent.

    "This scheme takes our environment regulation several steps back."

    India has enacted several laws to protect its forests, coasts and rivers, but they are rarely enforced. Illegal mining and industrial pollution have devastated vast tracts of land and bodies of water, harming communities dependent on them.

    The environment ministry said that projects applying for clearance in the next six months will be appraised by a committee, and that the regulatory process will be "stringent and punitive".

    As more land and resources are sought for industrial projects in one of the fastest growing economies in the world, these violations are becoming more common, analysts say.

    A 2013 law on land acquisitions for industries laid down strict rules for environmental and social impact assessments, but several states dilute these provisions, arguing they delay vital projects that create jobs and boost growth.

    India risks facing more conflicts over land and legal challenges to acquisitions as the dilution of laws hurts farmers and other vulnerable communities, said a former minister who helped frame the 2013 law.

    Earlier this week, an Indian court declared the sacred Ganges and Yamuna rivers living entities, giving them the same legal rights as human beings in an effort to protect them from further destruction.

    (Reporting by Rina Chandran @rinachandran, Editing by Alisa Tang. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit news.trust.org to see more stories.)

    http://www.reuters.com/article/india-landrights-regulations-idUSL5N1FK1VK
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    South32 to buy back $500 million of its shares


    South32 Ltd said on Monday it would return $500 million to shareholders, rewarding investors who had been waiting for the company to use its strong balance sheet and cashflows on bigger payouts or acquisitions.

    The diversified miner, spun off by BHP Billiton two years ago, said it would launch an on-market share buyback in Australia targeting 4.5 percent of its share base, which it expected to complete over 12 months, depending on market conditions.

    "Working capital has continued to unwind, prices continue to hold up strongly so we continue to accumulate cash into our bank account," South32 Chief Executive Graham Kerr said.

    "The reality is that we don't have a need for that cash today. So the $500 million dollar on market buyback we announced is the best way to get that cash to our shareholders over the next 12 months," he told Reuters in an interview.

    South32 shares last traded at A$2.66, about triple the value they were in January 2016 and about 28 percent higher than their launch price in May 2015.

    Kerr said S32 still has plenty of ammunition for mergers and acquisitions.

    "After the buyback we will have just over $500 million in net cash. We've always said our balance sheet could actually run at $500 million of net debt so I've still got about $1 billion's worth of opportunity fund sitting there."

    South32 has proposed a $200 million acquisition of Peabody Energy's  Metropolitan colliery in Australia, although the plan has raised competition concerns over control of the local coking coal market.

    It also said last month it had entered into an alliance with Australia's Ausquest Ltd (AQD.AX) to develop new projects, and has signed an exploration deal with Canada's Northern Shield Resources.

    "Longer term, we would have a bias towards base metals, copper, nickel, zinc, cobalt because they are used at different stages in economic development, rather than iron ore and metcoal which is more about the front phase of economic development," Kerr said.

    http://www.reuters.com/article/us-south32-buyback-idUSKBN16X13W
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    China Jan-Feb industrial profits surge 32 percent as commodity prices rally


    Profits of Chinese industrial firms surged 31.5 percent in the first two months of 2017 from a year earlier as prices of commodities from coal to iron ore raced higher, while strong imports also pointed to a pick-up in activity.

    Stronger earnings could give a further boost to fixed-asset investment, which quickened early in the year, and give China's "smokestack" industries more cash flow to start whittling away at a mountain of debt -- a key government priority this year.

    Total industrial profits over the first two months of the year were 1.01 trillion yuan ($147 billion), the National Bureau of Statistics said in a statement on Monday.

    The increase was mostly due to faster growth in prices of coal, steel and crude oil, He Ping, a statistics bureau official, said in a note accompanying the statement.

    The pace of profit growth picked up sharply from a 2.3 percent increase in December.

    Industrial profits rose 8.5 percent in 2016, snapping back from a slight drop in 2015, largely due to a sharp increase in prices of coal as well as raw materials such as iron ore which were needed to help feed a construction boom.

    China's economy got off to a strong start to 2017, supported by robust bank lending, a government infrastructure spree and a much-needed resurgence in private investment.

    The government boosted spending at the start of the year, with outlays rising 17.4 percent in Jan-Feb, compared to 12 percent growth over the same period in 2016.

    Industrial firms stand to benefit from fixed-asset investment that expanded more than expected in the first two months of the year, including a 27.3 percent increase in infrastructure spending.

    Shares of infrastructure companies have shot to a near 15-month high in Shanghai.

    Asia's largest oil refiner, state-owned China Petroleum and Chemical Corp (Sinopec), said on Sunday it expected a rise of about 150 percent in its first-quarter profit thanks to an increase in global crude prices.

    Sinopec plans to boost capital expenditure to 110.2 billion yuan this year, up 44 percent from last year.

    But investors in China are being torn between data showing a resilient economy and fears that expected policy tightening, while gradual, will eventually lead to higher borrowing costs and stunt business activity.

    Producer prices rose at the fastest pace since 2008 in February on the back of stronger demand and government-mandated cuts in excess capacity.

    However, most economists and even the statistics bureau believe producer price gains may soon start to slow.

    "The base effects are not going to be as flattering in coming quarters. We're going to see a decline in profit growth and producer price inflation from now onwards," says Julian Evans-Pritchard, an economist at Capital Economics in Singapore.

    "We shouldn't get too excited about some of these growth rates."

    Further clouding the outlook, steel and iron ore futures prices in China posted their biggest weekly drop in three months last week as high inventories raised concerns that demand in China is not picking up as much as had been expected.

    AS GOOD AS IT GETS?

    Evans-Pritchard says China is near a peak after a recovery from a cyclical downturn, with policy tightening and slower credit growth eventually going to drag on growth.

    "There is a real risk that by the end of the year the economy could be looking quite a bit weaker. I think all those signals suggest that this quarter is probably as good as its going to get," he said.

    Liabilities of industrial firms rose 6.6 percent year-on-year as of end-February.

    The statistics bureau gives combined figures for the first two months of each year to smooth out seasonal distortions caused by the long Lunar New Year holidays, when most companies are closed for the celebrations.

    The profit figures cover large enterprises with annual revenues of more than 20 million yuan from their main operations.

    http://www.reuters.com/article/us-china-economy-industrial-profits-idUSKBN16Y05C
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    Oil and Gas

    Shetland oil find ‘could be biggest of the century’


    The new Shetland discovery has sparked fresh hope for Scotland's North Sea oil and gas industry.

    An oil discovery has been made near the Shetland Islands which has been described as potentially the biggest find in British waters this century. Hurricane Energy is set to announce that surveys of its Halifax well in an area off the west of the Shetland Islands have identified a “kilometre-deep oil column” linked to its existing Lancaster find. 

    The firm is expected to say that this appears to be part of “a single large hydrocarbon accumulation”. The geological formation is thought to contain more than one billion barrels of oil. News of the find comes after the collapse of global oil prices in 2014, which has hit the North Sea industry hard and resulted in significant job losses. 

    Drilling began on the Halifax exploration well in early January and Hurricane said that the results would be due by the end of the month. Hurricane needs to raise about $400 million (£318m) to develop the project and aims to start producing oil from the Lancaster field in 2019. 

    It was formed 12 years ago and has drilled five wells in the west of Shetland area. Lancaster is expected to be confirmed as the “largest undeveloped field on the UK continental shelf”.

    Read more at: http://www.scotsman.com/news/politics/shetland-oil-find-could-be-biggest-of-the-century-1-4404215
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    Oman says it could cut crude exports by 15 pct from June for Sohar refinery -sources


    Non-OPEC oil producer Oman has notified customers in Asia that it could reduce supplies of crude by 15 percent from June to meet demand at a domestic refinery, and as part of its commitment to cut output under a landmark producers' agreement, three people who received the notices said on Friday.

    A cut would likely affect China most, as the world's second-largest oil consumer buys close to 90 percent of Oman's exports.

    Oman's Ministry of Oil and Gas (MoG) told buyers that the supply cuts are also to meet rising domestic demand at the state-owned Sohar refinery, which is being expanded, the people said. They declined to be identified because they weren't authorised to discuss the matter publicly.

    "Oman is giving buyers advanced notice of a potential cut in exports in June," one of the people said, adding that customers were informed the timing could still change. The cut won't necessary lead to problems for Chinese buyers as there are many other supplier choices in the well-supplied Asia crude market, he said.

    MoG could not be reached for comment as its office is closed for weekend.

    Oman's Minister of Oil and Gas Mohammad bin Hamad al-Rumhy said in October last year that the country's exports would drop by about 50,000 barrels a day when new refining capacity comes on stream in early 2017.

    The country cut its crude output by 45,000 barrels per day in January to 965,000 bpd from the previous month, to comply with a deal struck late last year by the Organization of the Petroleum Exporting Countries and non-OPEC producers to support oil prices.

    http://www.reuters.com/article/oman-oil-asia-idUSL3N1H13F9
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    Sinopec says expects to post 150 pct rise in Q1 profit


    China Petroleum and Chemical Corp said on Sunday it expected to report a rise of about 150 percent in its first-quarter profit thanks to an increase in international crude prices.

    The state-owned company, known as Sinopec Corp, reported a net profit of 6.19 billion yuan for the first three months of 2016.

    Earlier on Sunday Sinopec said net profits for the full year rose 44 percent to 46.4 billion yuan ($6.74 billion) on the back of strong performances in refining and chemicals.

    Fourth-quarter net profit jumped to 17.25 billion yuan from 9.9 billion yuan in the third quarter, it said in a statement to the Shanghai Stock Exchange.

    http://www.reuters.com/article/sinopec-corp-profitalert-idUSL3N1H30DJ
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    Statoil expands its international offshore portfolio


    Norwegian oil major Statoil has expanded its international offshore acreage portfolio by taking part in offshore lease sales in the UK and the US.

    In the U.S., the company was deemed the high bidder on 13 leases in the central region Gulf of Mexico lease sale 247, which took place on Wednesday, March 22.

    The company was the high bidder on all but two of the leases targeted, securing a stake in all of its main priorities. One of these two leases was taken by Shell who offered $24 million vs. Statoil’s $3.6 million. Shell’s offer was the highest bid for a single block in the whole lease sale.

    The first sale in the post-Obama era garnered $274.8 million in high bids for 163 tracts covering 913,542 acres offshore Louisiana, Mississippi, and Alabama.

    The sale can be seen as a success since a total of 28 companies submitted 189 bids totaling $315 million. In comparison, the lease sale held in August 2016, only saw three companies take part, submitting a total of $18 million in bids.

    Interestingly, Statoil had the second highest bid for a single block at $21 million, being only topped by Shell which offered $24 million for a single block.

    Since re-entering the U.S. Gulf of Mexico in 2004, Statoil has gained an ownership share in six producing fields, two projects under development, and one project in the definition phase.

    Production from Statoil’s US offshore portfolio averaged at around 60,000 barrels per day in 2016 and, according to the company, Statoil expects that figure to nearly double by 2020 which will make it a “top-five” producer from the deepwater Gulf of Mexico.

    UK expansion

    In the UK, Statoil was awarded six licenses, five as operator and one as partner, in the 29th Offshore Licensing Round, announced by the Oil and Gas Authority (OGA) on Thursday.

    Jez Averty, senior vice president for exploration in Norway and the UK in Statoil said: “Statoil has secured both drill ready prospects and frontier acreage, and the diversity of the awards is testament to Statoil’s belief in both the potential of the UK and that it remains an attractive place to explore.”

    The five operated licenses are located in the northern North Sea. Statoil and partner BP have committed to three firm exploration wells in this area.

    The sixth license awarded to Statoil, with Esso Exploration as operator, is located west of Scotland.

    “These awards are a result of a strategic decision by Statoil to explore in prolific but mature basins, combined with an emphasis on comprehensive regional work and investments in the most modern seismic datasets. In addition, we continue to diversify the UK portfolio by exploring in the true frontier areas such as the Rockall Basin,” says Averty

    Statoil says it has one of the most active exploration campaigns in the UK in 2017, with three exploration wells planned to be drilled over the summer. The three new well commitments will be integrated in future drilling plans.

    Statoil is also developing the Mariner field on the UK Continental shelf, due to come on stream in 2018.

    http://www.offshoreenergytoday.com/statoil-expands-its-international-offshore-portfolio/
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    Alternative bunker fuels viable but questions linger: industry sources


    Many shipowners will go into 2020 unprepared for the International Maritime Organization's 0.5% global sulfur cap for marine bunker fuels, panelists said at the Connecticut Maritime Association conference as questions remain about potential alternatives.

    "Are we going to rely on LNG ... are we going to go down the route of methanol, are we going to include more biofuels and what about innovative fuels that nobody has come up with yet?" Michael Green, global technical manager for bunker fuel testing at Intertek Lintec, said Wednesday.

    The IMO said in 2008 that all ships were required to use fuels with a maximum 0.5% sulfur content from January 1, 2020.

    Two popular alternatives to fuel oil are methanol and LNG.

    LOW ENERGY DENSITY

    Methanol can be made from any carbon source, including captured carbon dioxide and even by gasifying municipal solid waste. China, which consumes about 50% of the world's methanol, produces it from coal.

    One of the most important aspects of methanol is that it contains no sulfur content and is also readily available.

    "Methanol is one of the most widely shipped chemical commodities, any port in the world that has chemical storage tanks, we've got methanol there," said Greg Dolan, CEO of the Methanol Institute.

    Methanol is also bio-degradable, and has a half-life of 1-6 days in case of a spill. Nitrous oxide emissions are 60% lower than those from fuel oil.

    Waterfront Shipping, a wholly owned subsidiary of Methanex Corporation, has seven methanol-fueled chemical tankers under charter, Jason Chesko, senior manager of Global Market Development at Methanex Corporation, pointed out.

    Methanol tracks oil prices keeping it competitive against fuel oil, he added.

    It is easy to store as it does not require special tanks. The Stena Germanica, the world's first methanol-fueled ferry, stores it in its double-bottom tank.

    There are, however, some drawbacks such as its low energy density, half the energy content of diesel, meaning twice the volume is required.

    Sufficient supply could be hard to come by as well as a switch to methanol as bunker fuel would double global demand, Dolan pointed out.

    A 5% diesel content is required for methanol bunker fuel to be used as a "pilot fuel", meaning that the ship's engines would need to burn diesel before switching to methanol.

    The ship would require to modify its engine but the incremental cost was quite modest, Chesko said.

    LOWER EMISSIONS, HIGHER COSTS

    The movement toward a reduction in greenhouse gas emissions favors LNG as a bunker fuel, Aziz Bamik, general manager of GTT North America, said.

    There are no particulates, no sulfur oxide, almost no nitrous oxide and reduced carbon dioxide from burning LNG, he added.

    There are currently 100 LNG-fueled ships and an additional 101 on order as of February 2017, Gerd-Michael Wuersig, business director for LNG-fueled ships at DNV GL, said. The majority of those at sea, 57%, were in Norway but most new orders were from outside the country, he added.

    Sovcomflot had LNG-fueled tankers built and had 11 cruise ships were on order as well, he said.

    A lack of infrastructure was a problem for LNG, tied mainly to the high cost of building LNG storage and terminals. Another concern was the price as it would never be cheaper than fuel oil, he added.

    Additional tank space would be needed on the ship to accommodate LNG, 1.8-2 times more room would be needed if a ship switches from fuel oil to LNG, Bamik said.

    For now, scrubbers that remove sulfur emissions from high sulfur fuel oil appeared to be the likely solution, according to the speakers.

    As January 1, 2020 approaches, there was likely to be a rush to install scrubbers on ships, said Adrian Tolson, senior partner at 20/20 Marine Energy., which Wuersig added that for the time being, scrubbers were more popular than alternative fuels.

    http://www.platts.com/latest-news/shipping/houston/alternative-bunker-fuels-viable-but-questions-26692652
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    Vitol reports record volumes as gasoline, diesel trade booming


    The world's top energy trader Vitol saw a spike in annual traded volumes to a new record in 2016 as it sold more gasoline and diesel in markets such as the United States and Australia.

    Vitol said it now handles over 7 million barrels of crude and products per day, almost as much as overseas shipments of the world's top oil exporter Saudi Arabia.

    While Vitol's turnover fell to $152 billion in 2016 from $168 billion in 2015 as a result of lower energy prices, traded volumes spiked.

    Crude oil and product trading rose 16 percent to 2,597 million barrels or over 7 million barrels per day.

    Crude represented 48 percent of the traded barrel portfolio, and grew 16 percent year on year.

    The largest growth in percentage terms came from gasoline, up 44 percent and gasoil, up 26 percent, driven by increasing demand in the United States, Australia and a growing presence in key African markets.

    "2016 saw an end to the steep market contango that enhanced results in 2015, though ample supply in many petroleum markets generated a favorable market structure for much of the year," Vitol said.

    "(Global) demand growth of 1.4 million barrels a day exceeded our expectations slightly, but the continued efficiency gains within the exploration and extraction sector ensured the market was well supplied and the impact on price constrained."

    Vitol also said that the growth in supply of liquefied petroleum gas, both associated and non-associated, from U.S. shale, was creating new opportunities.

    "Our 2016 volumes increased by 131 percent and, longer term, we anticipate that the ample supply of LPG will facilitate the switch away from solid fuels for cooking in economies across Africa and Asia," it said.

    "In addition, we are working with power plants and light industry in Africa to help them move from burning fuel oil and diesel to LPG, a cleaner and more efficient source of fuel."

    Vitol also said it increased coal trading back to 2014 levels, reflecting the growing pull from Asia as new coal-fired power stations became operational, with an estimated 50 gigawatt plus of coal generation capacity added during 2016.

    http://www.reuters.com/article/us-vitol-results-idUSKBN16V0YW
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    Brazil court rules in favour of Petrobras in tax deduction case


    A Brazilian tax court ruled that state-controlled oil company Petróleo Brasileiro SA did not break the law by deducting expenses related to the development of oil and gas field from its 2009 income taxes.

    According to a Friday securities filing, the Finance Ministry could still appeal against the ruling by the tax auditing court, known as CARF.

    The Finance Ministry is seeking 5.1 billion reais ($1.6 billion) from Petrobras in compensation for the deduction, newspaper Valor Econômico reported on Thursday.

    http://www.reuters.com/article/us-petrobras-tax-idUSKBN16V1KD
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    Lamprell sees tough year ahead, recovery only in 2018

    Lamprell sees tough year ahead, recovery only in 2018

    Oil rig builder Lamprell Plc lowered its revenue forecast for this year and said it expected to start seeing a recovery in activity only in 2018.

    Lamprell said on Friday it expected 2017 to be probably its toughest year yet, despite early signs of recovery in drilling activity.

    "We do see early signs of optimism, but caution remains the watchword," Chief Executive Christopher McDonald told Reuters, adding that it would be another 12-18 months before it sees any flows to the service sector.

    The company expects 2017 revenue to be in the lower half of its earlier forecast range of $400 million to $500 million, in the absence of large project deliveries in the second half of the year.

    Lamprell, like its peers, has been cutting costs as oil explorers have slashed spending and canceled contracts to counter a more-than-2-year rout in oil prices.

    The company said it had cut about 20 percent of its administrative staff in 2016, leaving it with 1,031 core admin employees. The company had a total workforce of 5,762 employees at the end of 2016.

    Lamprell raised the total impact of the settlement related to a delay in delivery of a jackup rig to Ensco Plc to $42.6 million as cost estimate of additional services rose to $17.6 million from $10 million.

    The company said in July that it had taken a $25 million exceptional charge to its 2016 revenue due the settlement.

    Lamprell said on Thursday settlement talks to recover cost from the maker of the rig kit, Cameron LeTourneau, are ongoing.

    Last year, Saudi Aramco signed a memorandum of understanding for the construction of a shipbuilding complex with National Shipping Co of Saudi Arabia 4030.SE, a state-controlled firm which ships oil for Aramco, South Korea's Hyundai Heavy Industries (009540.KS) and a unit of Lamprell.

    The company did not provide any update on the talks but McDonald told Reuters that the discussions were in an advanced stage.

    McDonald said the maritime project provided "parallel opportunities that we are currently in early stages of pursuing," but declined to comment further.

    Lamprell, which runs three rig building yards in the UAE, said it expected the overhead cost cuts to contribute annualized savings of $23.4 million in 2017.

    Lamprell's 2016 revenue fell 19.1 percent to $705 million for the year ended Dec. 31.

    http://www.reuters.com/article/us-lamprell-outlook-idUSKBN16V0QU

    Attached Files
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    U.S. rig count climbs by 20 in 10th weekly increase


    Drillers put 20 oil and gas rigs back into U.S. fields this week, marking the 10th consecutive weekly increase in the nation’s rig count.

    The increase brought the U.S. drilling fleet to 809, just about double its level in May, when the count hit an all-time low of 404, according to Baker Hughes.

    The oil field services company said Friday oil rigs climbed by 21 to 652, while gas rigs declined by two to 155, and rigs categorized as miscellaneous went from one to two.

    Seven of the oil rigs were sent to the Permian Basin in West Texas. Drillers dispatched others to the Eagle Ford Shale in South Texas, the Williston Basin in North Dakota and other conventional plays.

    http://fuelfix.com/blog/2017/03/24/u-s-rig-count-climbs-by-20-in-10th-weekly-increase/
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    Shale gas technology to reduce pollution problem in China


    China is banking on the shale gas technology in North America to extract methanol and clean its pollution by putting it in use for refinery chemicals, clean energy and thermal fuels, China Daily reported on March 24, citing a source during the Boao Forum for Asia 2017.

    Spearheaded by Shanghai Bi Ke Clean Energy Technology Co Ltd, a state-owned enterprise focused on methanol production, a plant has been set up in the state of Washington in the United States to churn out methanol out of shale gas, said Wu Lebin, chairman of Bi Ke's parent Chinese Academy of Sciences Holdings Co Ltd.

    The facility has garnered investment totaling $6 billion from both Chinese and US investors. Wu said he expected the first batch of methanol to be shipped to China by 2019.

    "If we replace diesel, coals and gas with methanol to power vehicles, the emission of PM2.5 would be slashed by 80%, and carbon emission would be halved. Meanwhile, the cost is only two-thirds that of coals," he said.

    http://www.sxcoal.com/news/4553938/info/en

    Attached Files
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    U.S. Shale to Feed European Gas Market Battered by Winter


    West Texas oil wellsThe heart of Europe’s gas market may finally get a helping hand from the American shale revolution as fuel is poised to cross the Atlantic to replenish depleted inventories after the coldest January in seven years.

    Northwest Europe, one of the biggest trading regions for the fuel, hasn’t yet attracted any liquefied natural gas cargoes from the U.S., which the shale boom turned into the world’s biggest gas producer. So far, sellers have favored markets in South America and Asia where prices have been higher.

    But that may be about to change with spring weather poised to damp demand and prices in the biggest consuming region of Japan and South Korea moving closer to those in the U.K. and the Netherlands. Supplies from the U.S. may arrive in the coming months to help replenish European stocks at their lowest level since 2013, according to Houston-based Cheniere Energy Inc., which is expanding its export plant in Louisiana.

    “U.S. gas will find an obvious home in Europe once most other markets are filled up,” Trevor Sikorski, head of natural gas and carbon at Energy Aspects Ltd. in London, said by email. “There should be lots of gas as three trains should be operating for most of summer 2017” at Cheniere, he said.

    As Asian demand subsides with milder weather, regional prices will move closer to parity with European rates, according to Energy Aspects.

    The arbitrage for U.S. gas to both Europe and Asia is already “wide open,” Citigroup Inc. said in a report emailed Wednesday. Asian LNG prices may slide to below $5 per million British thermal units after May, according to the bank. That’s the price of summer gas in the U.K. on ICE Futures Europe in London.

    “We are looking to sell into Europe in April-May as European storage sites start refilling, but we will only sell to Europe if we see it offers a price premium,” Eric Bensaude, Cheniere’s managing director of commercial operations, said by phone from London. “The main reason why we did not sell in Europe in the winter is because other markets were paying a higher price.”

    Most U.S. LNG exports have so far gone to Latin America, with cargoes also reaching Asia and the Middle East. Supplies from Cheniere’s Sabine Pass have also arrived in Spain, Portugal, Italy and Turkey at an increasing rate over the past three months, according to London-based consultant Timera Energy, which counts BP Plc to Gazprom PJSC as clients. The company estimates that only 17 percent of U.S. LNG went to Europe since exports started in February 2016.

    “After Latin America, Europe is the next cheapest destination for U.S. exports from a shipping cost perspective,” Timera said this month in a report. “As U.S. export volumes grow, significant volumes are likely to land in Europe, or to displace cargoes that flow to Europe from elsewhere.”

    Cheniere’s marketing unit doesn’t have to pay the fixed fees the company charges companies with supply contracts, including Royal Dutch Shell Plc. Such costs add to export prices of the fuel.

    Still, insufficient differences between U.S. and European gas prices may keep those cargoes at “minimal quantities,” said Zach Allen, president of energy consultancy Pan Eurasian Enterprises in Raleigh, North Carolina, who’s tracked the LNG market for more than a decade.

    Competition will also come from Russia and Norway. They produce gas at a lower cost than U.S LNG and ship it via pipelines instead of on tankers. Russia’s Gazprom is also targeting Europe’s low inventories to help it sell a record volume to its highest-paying consumer.

    It takes about two weeks to transport a cargo from Sabine Pass to France and as long as a month to India. U.S cargoes have no restriction on final destination, which means that companies with several supply options can ship to markets with highest prices.

    “This is the evolution for the LNG market, it ends up where it’s needed most, Steve Hill, executive vice president for gas and energy marketing and trading at Shell, told reporters on Feb 20. “If it’s in the U.K., that’s where it will come.”

    http://boereport.com/2017/03/24/u-s-shale-to-feed-european-gas-market-battered-by-winter/
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    Halliburton adding 2,000 U.S. jobs as oilfield activity picks up


    Halliburton employees work on high pressure pipes supplying a fracking site managed by Octane Energy on Friday, Sept. 23, 2016 near Stanton. (James Durbin/Reporter-Tele­gram)

    Halliburton on Friday said it’s adding 2,000 U.S. jobs in the first quarter and ramping up activity faster than anticipated to try to match the surging oilfield activity, especially in West Texas.

    In a rare operations update call, Halliburton Chairman and CEO Dave Lesar said the company is spending more money now to protect market share and ensure stronger profits in the future. The plan to “frontload as much of the costs as we can” will mean weaker profits short term to better position Halliburton in the future.

    “We are coming off of a historic trough, so what we have to add back is almost unprecedented,” Lesar said, warning that its first-quarter earnings won’t be as strong as previously projected.

    At the end of the year, Halliburton had 50,000 employees after cutting 35,000 positions over a two-year oil bust. Now, jobs are beginning to return and idled equipment reactivated. Profits will follow later, Lesar said.

    The rig count last week rose to 789, up from a low of 404 in May. But because each rig can now drill more wells and each well can produce more oil, Halliburton President Jeff Miller compared current activity to that of 2014, before prices fell. “Nine hundred (rigs) is the new 2,000,” he said.

    Because oilfield activity is picking up faster than Halliburton anticipated, the company is losing some market share temporarily and spending more to maintain as much of that market share as possible, said Bill Herbert, a senior energy analyst at Piper Jaffray & Co.

    The state of Texas approved almost 1,000 oil and gas drilling permits in February, as the industry responds to higher oil prices.

    Halliburton is the North American leader in hydraulic fracturing, used to extract as much oil and gas as possible from shale rocks.

    Halliburton also is hurt by supply-chain price increases, like the rising cost of sand for fracking, while the company’s own services pricing hasn’t risen to match its growing costs.

    Because Halliburton doesn’t have enough sand supplies under contract, Lesar said, Halliburton is taking a $50 million hit just on inflated sand prices.

    Internationally and offshore, the industry continues to struggle and won’t begin to bounce back until late 2017 or beyond, he added.

    It also doesn’t help that Halliburton lost Chief Financial Officer Mark McCollum, who left to become CEO at smaller rival Weatherford International.

    Halliburton’s financial situation was improving late last year, but it still posted a loss of $149 million in the fourth quarter and a $5.7 billion loss during all of 2016.

    http://fuelfix.com/blog/2017/03/24/halliburton-adding-2000-u-s-jobs-to-match-growing-oilfield-activity/?utm_content=buffera9214&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

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    Shell and Anadarko mull clean break from Permian venture - executive


    Royal Dutch Shell Plc and Anadarko Petroleum Corp may let a 10-year joint venture in the oil-rich Permian Basin of Texas expire and split their properties, hoping to speed up development, according to a senior Shell executive.

    The divorce and re-parceling of acreage would let each company drill and develop new wells at its own pace in the Permian, which has become the U.S. oil industry's hottest development area for its low operating costs as crude prices CLc1 hover under $50 per barrel.

    Shell and Anadarko have been discussing how to proceed after the partnership agreement expires this summer and are not likely to renew it, Greg Guidry, who oversees the Anglo-Dutch group's shale business, told Reuters.

    The talks come as Shell hopes to boost its North American shale output by 140,000 barrels of oil equivalent per day in the next three years, a goal that relies largely on the Permian, the largest oilfield in the United States.

    Talks have involved scenarios where acreage would be divvied up, allowing each company to individually develop the fields, he said. Under one proposal, "we could have ideally two 100 percent owned and operated parcels," Guidry said.

    "That would be a split that will allow us to manage the flexibilities in terms of capital pace, separate of Anadarko," he said in an interview this month.

    A Shell spokesman said late last week that negotiations continue between both sides.

    The agreement was first signed in 2007 between Anadarko and Chesapeake Energy Corp (CHK.N). Shell bought Chesapeake's Permian holdings in 2012 and inherited the joint venture.

    If the two sides were to do nothing, Anadarko would become the operator of the more than 350,000 acres (142,000 hectares) in the Delaware portion of the Permian, with a roughly 60 percent interest. A breakup would give Shell an opportunity to prove it can grow on its own in the largest American shale oil field.

    Terms of the joint venture are not outlined in regulatory filings for either company, fuelling confusion among investors about what could come after the deal expires.

    Anadarko Chief Executive Al Walker said earlier this month that he preferred an arrangement that would give his company majority control over the land once the joint venture expires.

    "We and Shell, I think, have an extremely attractive position in the (Permian)," he told investors on a conference call. "We think the economics are certainly compelling for us to be operator going forward."

    An Anadarko spokesman declined to comment beyond Walker's remarks.

    The joint venture, where costs and profits are split equally, has benefited Shell more than Anadarko given that the latter has far more experience in horizontal well development so crucial to Permian operations, analysts at Bernstein said last month.

    A clean split could be logistically challenging with acreage arrayed in a checkerboard pattern, the way drilling properties are organized in West Texas. Moving a rig or other equipment between such parcels would become more laborious in such a scenario.

    "It would be unusual if either party would view that as an optimal solution because that's an inefficient way to develop those assets," said Ben Shattuck, an oil industry analyst with consultancy Wood Mackenzie.

    PERMIAN RED-HOT

    The Permian has seen a flurry of deals in recent months despite a wobbly recovery in global oil prices as shale producers in the region have been able to increase output and slash production costs, outpacing any other onshore U.S. basin and many deepwater oil fields around the world.

    The Anglo-Dutch company is accelerating its North American shale output faster than planned to lock in quick returns from what has become one of its most profitable businesses, Guidry said in an interview earlier this month.

    "The strategic fit of the Permian in the Shell portfolio will be different from a the strategic fit of the Permian in a pure upstream player."

    Anadarko also has been moving staff to West Texas to develop its holdings. The company sold assets elsewhere in its portfolio and, after deals close, is expected to have more than $6 billion in cash that analysts expect it to primarily use on Permian expansion projects.

    http://www.reuters.com/article/us-anadarko-petrol-shell-permian-exclusi-idUSKBN16Y0ED
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    Alternative Energy

    Shanxi renewable energy power output exceeds 50 TWh


    Shanxi's renewable energy power output has reached 53.8 TWh by end-February since its first wind power plant was put into operation in July 2008, indicating that its renewable energy development has entered a new stage, local media reported on March 23.

    In 2016, Shanxi's wind and solar power output totaled 16.09 TWh, up 5.2% from the previous year, accounting for 10.3% of the total power output in the province.

    By end-February, installed capacity of wind and solar power reached 7.91 GW and 2.65 GW, surging 18.24% and 148.33% year on year, respectively.

    By 2020, the province's renewable energy power capacity is expected to reach 18 GW.

    http://www.sxcoal.com/news/4553896/info/en
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    Thailand approves electric car plan


    Thailand approved a promotion scheme for electric cars, the state investment agency said on Friday.

    The agency also approved tax incentives to promote production of three types of electric cars in Thailand, Hirunya Suchinai, the head of BOI, told a new conference.

    Applications for production of hybrid electric vehicles and plug-in hybrid electric vehicles must be made this year and those for battery electric vehicles by 2018, she said.

    The scheme, aimed at attracting demand for environmentally friendly vehicles, will be submitted for cabinet approval next Tuesday, Industry Minister Uttama Savanayana said.

    Thailand is a regional manufacturing hub and export base for the world's top carmakers. The auto industry accounts for about 10 percent of the country's gross domestic product.

    http://www.reuters.com/article/thailand-investment-idUSL3N1H13FS
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    Precious Metals

    US Court Upholds $1.4 Billion Judgment Against Venezuela for Crystallex Expropriation


    "Crystallex is now free to enforce the $1.4 billion judgment against Venezuela's assets in the United States," says international lawyer Russ Dallen, who follows the situation closely as head of Caracas Capital and the $5 billion Venezuela Opportunity Fund. "Crystallex will now likely move to seize Venezuela's entities in the U.S., including PDVSA's Delaware company PDV Holding and its Citgo subsidiaries."

    A Federal Court in Washington, D.C. has upheld and registered a $1.4 billion award against Venezuela in favor of Canadian goldminer Crystallex for the expropriation of Crystallex's Venezuelan gold mining operations.

    "Because none of Venezuela’s arguments suffice to vacate or modify the award under the New York Convention, the Court grants Crystallex’s petition to confirm the award and denies Venezuela’s motion to vacate," concluded U.S. Federal District Court Judge Rudolph Contreras, dismissing Venezuela's objections.

    Hughes Hubbard & Reed led the successful legal team on behalf of Crystallex for the registration and verification of the award. Foley Hoag led Venezuela's defense team. Crystallex has also had the award upheld and registered in Canada.

    "Crystallex is now free to enforce the $1.4 billion judgment against Venezuela's assets in the United States," says international lawyer Russ Dallen, who follows the situation closely as head of Caracas Capital and the $5 billion Venezuela Opportunity Fund. "Crystallex will now likely move to seize Venezuela's entities in the U.S., including PDVSA's Delaware company PDV Holding and its Citgo subsidiaries."

    Crystallex is already suing Venezuela's PDVSA, PDV Holding and Citgo in U.S. Federal District Court in Delaware for the "fraudulent transfer" of billions of dollars of Citgo assets out of the U.S. Russia's state owned oil giant Rosneft has now also been named a defendant in that suit after an investigation by the Latin American Herald Tribune uncovered that Venezuela had mortgaged 49.9% of Citgo to Rosneft in exchange for a $1.5 billion loan. That innovative lawsuit, led by Gibson, Dunn and Crutcher, is ongoing, and parts of it are already in the Federal Court of Appeals.

    http://laht.com/article.asp?ArticleId=2433510&CategoryId=10717#.WNfeFM5MTRY.twitter
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    Base Metals

    Escondida outcome seen as disaster for BHP as workers return


    The end of a historic strike at Chile's Escondida copper mine, the world's biggest, has left its owner, BHP Billiton, nursing an estimated $1 billion loss and probably in a weaker position for negotiations in a year or so, company and industry insiders said.

    On Thursday, the 2,500-member union at the mine decided to end the strike after 43 days by invoking a legal provision that allows it to extend the old contract by 18 months.

    Workers will begin the gradual job of getting Escondida up and running again from Saturday, in a tense atmosphere and with little resolved for either the union or BHP.

    The resolution will be a relief for the Chilean economy, which analysts say may contract this quarter for the first time since 2009 due to the strike. Escondida produced some 5 percent of the world's copper last year and the resumption of output will also ease supply concerns.

    Workers told Reuters on Friday they were satisfied with the result. Although they lose out on any signing bonus or pay rise, the extension means they get to maintain current working conditions and benefits, which Escondida wanted to change. Their position in 2018 will also be stronger, thanks to new labor laws in Chile coming into practice next month.

    But Escondida is deeply disappointed, company insiders said. Negotiators underestimated the determination of the union to keep their benefits, and did not expect workers to trigger the legal provision and wind up losing out on their bonus, they said.

    The company has not given an estimate for the cost of the stoppage, but extrapolating from its usual production rhythm gives a loss of close to $1 billion.

    "We regret that the collective negotiation process ended in this way," Escondida President Marcelo Castillo said in a statement on Friday.

    "This new scenario obliges us to revise our plans, our operating model, and our structures to face this reality, which evidently was not what we wanted," said Castillo.

    The union rejected similar comments from Castillo on Thursday, calling them a veiled threat of layoffs, and saying that "if the company wants to lose another $1 billion, we are ready to fight."

    REFORM GIVES WORKERS NEW TOOLS

    When the two sides sit down next year, there will be one key difference.

    Legislation passed last year by the center-left government of President Michelle Bachelet and taking effect next month will likely give the union a number of useful legal tools they previously lacked.

    "This round of Escondida negotiations was very atypical because it was the last before the labor reform," said Juan Carlos Guajardo, president of Chilean mining consultancy Plusmining.

    The existing contract's expiry at the end of January meant that Escondida workers just missed out on being covered by the incoming law, he said.

    From April, two of the union's three core demands will be at least partially covered by the new rules, lawyers said.

    Reducing previous benefits would be largely illegal. And the company would be forced to use the previous contract's minimum benefits as its negotiating floor.

    The labor reform will also prohibit the replacement of striking workers.

    Contract negotiations would need to be initiated in as soon as a year, a short time after the mine is back up and running. Castillo said on Thursday the mine would take up to eight months to resume full operations.

    Relations have become bitter after six weeks of recriminations and suspicion.

    "The relationship between the company and the union is probably going to stay as it is now and the negotiations ended poorly," said labor lawyer Luis Lizama. "So I doubt we'll see good relations between the two sides going forward."

    http://www.reuters.com/article/us-chile-copper-labor-idUSKBN16V2SL
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    Vedanta to invest $1 billion in Zambian copper mine


    Indian mining company Vedanta Resources said on Friday it will invest $1 billion in its Zambian mining unit Konkola Copper Mines (KCM), creating 7,000 jobs.

    Vedanta announced the investment after a meeting between its Chairman Anil Agrawal and Zambian President Edgar Lungu.

    Vedanta has a majority stake in KCM and has said the mine could produce copper for another 50 years.

    Since 2004, KCM has invested almost $4 billion to upgrade and expand. Vedanta did not say how much the additional $1 billion would expand production or by when.

    Agrawal said he wanted KCM to be the biggest integrated copper producer in Africa.

    "The ramp up of Konkola is the centerpiece of my 50-year vision for KCM. It's technically very challenging, because of the massive amount of water we have to pump out of the mine, but I’m determined to find technical solutions," Agrawal said in a statement.

    KCM is one of Zambia's largest mining firms and produced 168,923 tonnes of finished copper in the financial year ended March 31, 2015, the latest available data.

    http://www.reuters.com/article/us-vedanta-res-plc-zambia-idUSKBN16V25O
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    Rio awards A$900m in contracts as Amrun mine development progresses


    Production and shipping from the Amrun bauxite mine, in Queensland, is on track to start in the first half of 2019, with mining major Rio Tintothis week announcing the award of more than A$900-million on contracts to Queenslandsuppliers.

    Queensland Premier Annastacia Palaszczuk said Rio’s significant investment in local and regional suppliers will provide a tremendous boost to the economy of Queensland.

    “The Amrun project will ensure Queensland businesses and their employees will continue to reap the benefits of many development opportunities for years to come.

    “It is a best practice example of encouraging local and Indigenous participation with substantial employment targets already agreed with many key suppliers.”

    Rio Tinto CEO Jean-Sébastien Jacques said the company was proud of the contribution the asset was making in supporting Queensland communities, pointing out that more than 1 600 people have been engaged by contractors to work on the project so far. Around 77% of those contracted are from Queensland and 70% are new hires.

    The Amrun project will replace the depleting East Weipa bauxite mine and will increase overall bauxite exports from Cape York by around ten-million tonnes a year.

    The A$2.6-billion project will produce at an initial rate of 22.8-million tonnes a year, with the option to expand to up to 50-million tonnes a year.

    http://www.miningweekly.com/article/-rio-awards-a900m-in-contracts-as-amrun-mine-development-progresses-2017-03-24
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    Steel, Iron Ore and Coal

    Japan's Tohoku reaches settle on April annual coal deals with some sellers


    Japan-based electricity generator Tohoku Electric Power had agreed on $80-$83/mt FOB Newcastle with some of its Australian thermal coal suppliers for annual negotiated term contracts starting April 1, a source familiar with the matter said Friday.

    The agreed price range of $80-$83/mt FOB Newcastle for premium-grade Australian 6,322 kcal/kg gross-as-received thermal coal is unusual this year, as it was struck between Tohoku Electric and Australian coal producers other than Glencore or Rio Tinto, the two companies that historically have taken a leading role as suppliers in these annual price talks.

    Several sources said that Tohoku Electric was still in negotiations with Glencore to settle a price for thermal coal to be delivered in fiscal 2017-2018, the deadline for which is April 1.

    Initial market reaction to the price settlement was that it was favorable to both Japanese buyers and Australian sellers.

    On the one hand, the range is considerably higher from the $58-$61.60/mt FOB Newcastle settled for fiscal 2016-2017.

    But, the current price range is still much lower than the $94.75/mt FOB Newcastle achieved by Australian coal producers for the October 2016-September 2017 term contracts with Tohoku Electric.

    Tohoku's April fiscal year term contract prices are important in the Asian thermal coal market because they are used by many Japanese buyers and has a benchmark status in the region.

    The contracts starting from April 1 cover the largest volume of Japanese thermal coal imports, around 20 million-40 million mt depending on prevailing demand, while other annually negotiated contracts that begin from June and October cover lower volumes.

    Two other Japanese power utilities, Tokyo Electric and Chubu Electric, have moved over from fixed prices to floating market prices for their contracts.

    Another market source said Friday that an unnamed Australian thermal coal producer with operations in the Hunter Valley coal field of New South Wales had settled with Tohoku Electric at around $84/mt FOB Newcastle for April 2017 fiscal year contracts, basis 6,322 kcal/kg GAR.

    The agreement for this unnamed coal producer is believed to include a clause that provides for discounts if the buyer takes larger volumes.

    Term contract price talks between Tohoku Electric and some of its other major suppliers, including Glencore, are expected to carry on next week.

    The Switzerland-based company's original offer to Tohoku Electric of $93/mt FOB Newcastle, basis 6,322 kcal/kg GAR, for April contracts were still under negotiation, according to three separate market sources.

    One market source said that Glencore might lower its offer price to around $90/mt FOB Newcastle when talks restart with Tohoku Electric after the weekend.

    A Sydney-based spokesman for Glencore said Friday that the company was not commenting on contract negotiations.

    http://www.platts.com/latest-news/coal/perth/japans-tohoku-reaches-settle-on-apr-annual-coal-27799092
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    Mongolia Feb coal exports surge 84.9pct on mth


    Coal-rich Mongolia exported 4.86 million tonnes of coal in February, surging 84.9% from 2.63 million tonnes in January, and up from 0.28 million tonnes in February 2016, showed data from the Mineral Resources Authority of Mongolia.

    Exports of washed coking coal increased 31.55% from a month earlier to 0.43 million tonnes in February, while that of raw coking coal dropped 24.28% from January to 0.83 million tonnes.

    The country exported 0.66 million tonnes of thermal coal in the month, down 5.28% month on month.

    In February, Mongolia produced 8.43 million tonnes of coal, increasing 490% year on year and up 55.28% month on month.

    Last year, the country's coal output increased 44.01% from a year ago to 35.19 million tonnes.

    In February, coal sales increased 84.15% month on month to 6.66 million tonnes, with domestic sales up 82.07% from January to 1.8 million tonnes.

    http://www.sxcoal.com/news/4553889/info/en
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    Weekly US coal production dips 4.4% as coal demand slows


    Weekly US coal production totaled an estimated 14.1 million st in the week that ended March 18, down 4.4% compared with the prior week, but up 6.9% from the year-ago week, US Energy Information Administration data showed Thursday.

    Apart from the holiday-shortened week at the start of the year, the most recent estimate was the lowest so far this year.

    Warmer-than-normal weather has slowed demand for coal, and stockpiles remain relatively flat. Platts Analytics' Bentek Energy unit estimates stockpiles stood at 154.8 million st in the week that ended March 16, down 0.5% compared with the previous week.

    Based on EIA estimates through the first 11 weeks of the year, annualized US coal production in 2017 would total 817 million st, up 10.6% compared with 2016's total. In the most recent week, coal production in Wyoming and Montana, which primarily consists of coal from the Powder River Basin, totaled an estimated 5.98 million st, down 2.2% compared with the prior week, but up 8% from the year-ago week.

    On an annualized basis, coal production in Wyoming and Montana would total 342 million st, up 3.6% from last year.

    In Central Appalachia, weekly coal production totaled an estimated 1.48 million st, down 1.3% from the previous week, but up 0.1% from last year. The region's annualized 2017 production would total 83.7 million st, up 8.8% from last year.

    In Northern Appalachia, weekly coal production totaled an estimated 2.1 million st, the lowest estimate so far this year, down 6.3% from a week earlier, but up 12.7% from the year-ago week. Annualized production would total 122.5 million st, up 17.6% from last year.

    In the Illinois Basin, weekly coal production totaled an estimated 2 million st, down 2.8% from the prior reporting period, but up 4% from last year. Annualized production would total 114.8 million st, up 13.4% from 2016.

    http://www.platts.com/latest-news/coal/houston/weekly-us-coal-production-dips-44-as-coal-demand-21249879
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    Shipment delays continue in E Kalimantan as Indonesia government cracks down on union


    An Indonesian government crackdown on a local labor union of stevedores in Samarinda, East Kalimantan is likely to cause further delays to thermal coal loading amid a market already tight for available prompt cargoes, sources said Thursday.

    According to sources, the government placed Samudra Sejahtera Stevedores Company (Komura) under investigation last Friday, consequently halting the provision of services to vessels coming into the anchorage point of Muara Berau this week.

    Three sources said vessels that already started loading last Friday will be allowed to complete their operations. Also, gearless shipments were able to continue loading through the use of floating cranes, they said.

    Geared vessels expected to arrive this week will be most affected, as they normally need 12-15 people to operate their cranes. This is where the stevedores come in, an Indonesia-based source said.

    "There is already a supply availability problem. This would further add to [the tight situation]," a Singapore-based trader said, noting that he dared not buy any cargoes for April.

    An Indonesia-based source said one of his Supramax vessels is due to arrive on March 24, adding: "I have no clue how to handle the situation. We can arrange for a floating crane but for that I would need approval from my customer."

    The Indonesia-based source estimated this issue to last for a week. "If it takes more than a week, thermal coal prices could be affected," he said.

    Currently, close to 40 vessels are waiting around Muara Berau, according Platts trade flow software cFlow.

    Another Indonesia-based source said incoming vessels might have to shift to nearby anchorage point Muara Djawa, 74 nautical miles or about six hours away from Muara Berau, or arrange floating crane. At the moment, he had seen an increase in floating crane costs in East Kalimantan. He was quoted $1.30/mt, up from the average $1/mt.

    A source at one of the major producers in the region noted they load through a floating terminal and are not impacted.

    However, he added, "Sudden swap of vessels or even of port is not easy. This will cause delivery delays and impact the prices."

    Diverting ships to Muara Djawa was not a simple solution though, sources said, due to rough waters in the area during this time of the year.

    "It's normally dangerous for barges to navigate the waters in Muara Djawa area to load vessels around January to June," an Indonesian coal miner said.

    UNPAID FEES

    The Indonesia-based source said miners normally pay a nominal ship-to-ship fee to the local port authority based on the quantity loaded in the vessel. But since most of the miners' offices were in Jakarta, they send the money to a stevedoring company, which then pays for services on their behalf.

    "The problem is, some stevedore companies only paid 10%-15% of the total amount due. Soon, the government saw a discrepancy between the overall ship-to-ship fee and the total supposed to have been collected from the number of vessels allowed to sail," he said.

    http://www.platts.com/latest-news/shipping/singapore/shipment-delays-in-e-kalimantan-as-indonesia-27798204
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    Australian group lines up China backing for new iron ore rail, port


    China State Construction Engineering Corp Ltd has tentatively agreed to build a new port and rail line for a yet-to-be-approved iron-ore mine in Western Australia, according to a memorandum of understanding with privately-owned New Zealandfirm BBI Group.

    The MOU, tied to a A$6-billion ($4.6-billion) mine, rail and port project, was signed on Friday in a ceremony attended by Chinese Premier Li Keqiang and Australian Prime Minister Malcolm Turnbull, BBI Group said in statement.

    http://www.miningweekly.com/article/australian-group-lines-up-china-backing-for-new-iron-ore-rail-port-2017-03-24
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    Chinese iron ore futures are getting smoked


    Chinese iron ore futures were slammed on Monday, doubling the losses seen overnight on Friday.

    The most actively traded September 2017 contract on the Dalian Commodities Exchange slumped 5.26% to 549.5 yuan a tonne, having hit a low of 541 yuan earlier in the session.

    Here’s the final scoreboard, revealing that it was not just iron ore that was the wars on Monday.

    It was a big, ugly move no matter how you put it, particularly for coking coal which was sitting higher before the start of trade.

    As a result of today’s decline, the September 2017 iron ore contracts now sits at the lowest level since early January this year, suggesting that further downside pressure in spot markets may also follow suit when Metal Bulletin releases its daily Iron Ore Index later in the session.

    On Friday, the spot price for benchmark 62% fines slid by 1.5% to $85.06 a tonne, according to Metal Bulletin, leaving its loss for the week at 7.9%.

    Helping to explain the weakness in iron ore contracts on Monday, rebar futures traded separately on the Shanghai Futures Exchange also tumbled, finishing down 3.06% at 3,108 yuan. At one point it fell to as low as 3,055 yuan.

    While some put the decline in iron ore prices down to mounting inventory at Chinese ports, currently sitting at the highest levels since 2004 according to data form SteelHome, others believe that the outlook for steel prices is now playing an even greater role in determining iron ore prices.

    “With iron ore prices so leveraged to steel prices at the moment, market conditions in China’s steel sector are increasingly becoming more important,” Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank, wrote last week.

    “With steel stockpiles now at levels seen in early 2015 on a days of supply basis, we may finally be at the end of China’s restock cycle, curbing a key upside driver for steel prices.


    Read more at https://www.businessinsider.com.au/iron-ore-price-dalian-futures-smoked-2017-3#Y5pKLdtKuF8CxTEf.99
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    Vale says U.S. court annuls most of class action over dam disaster


    Brazilian miner Vale SA said on Friday the United States District Court for the Southern District of New York annulled the majority of a class action lawsuit against the company and executives over the collapse of a tailings dam in Brazil in 2015.

    The only parts of the case that remain ongoing are linked to specific statements made by Vale in 2013 and 2014, and a conference call in November 2015, the company said.

    http://www.reuters.com/article/brazil-vale-lawsuit-idUSL2N1H1285
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