Mark Latham Commodity Equity Intelligence Service

Friday 30th September 2016
Background Stories on www.commodityintelligence.com

News and Views:

Attached Files








    Macro

    Toyota drops diesel from new model, signals likely phase-out


    Toyota has decided to drop diesel engines from its new C-HR compact in the wake of Volkswagen's emissions scandal and will probably do the same for future model renewals, the carmaker's second-ranking global executive said on Thursday.

    The Japanese automaker decided "within the last six to 12 months" not to offer a diesel version of the car, unveiled at the Paris auto show, because demand for the powertrain technology is falling sharply, Executive Vice President Didier Leroy told Reuters in an interview.

    If faced with a renewal decision today for other models up to and including the larger Auris compact, a Toyota staple, "we would probably do the same thing", Leroy added.

    Toyota's decision is the latest example of how the so-called "dieselgate" scandal is forcing carmakers to rewrite strategic plans that will shape their futures for years to come.

    Reuters reported this month that Renault expects diesel engines to disappear from most of its European cars after the French automaker reviewed the costs of meeting tighter emissions standards following Volkswagen's scandal.

    While the scandal centred on the German carmaker's cheat software, it also focused public attention on an industry-wide disparity between nitrogen oxide (NOx) emissions on the road and those recorded in regulatory tests.

    Mass-market diesels that meet legal NOx limits in approval tests commonly emit at least five times as much in everyday use.

    Renault has said it complied strictly with regulations and that its cars were not equipped with emissions falsifying software.

    From 2019, vehicle approvals will depend on emissions performance during real driving. This is compelling manufacturers to install costlier emissions treatment systems.

    http://www.reuters.com/article/autoshow-paris-toyota-diesel-idUSL8N1C5388

    Attached Files
    Back to Top

    China September factory activity expands marginally as orders edge up-Caixin PMI


    A worker verifies a product at a steel factory in Dalian, Liaoning province, China September 1, 2016. China Daily/via REUTERS

    China's factory activity expanded in September as domestic and export orders picked up but the improvement was marginal and manufacturers continued to shed jobs, a private business survey showed on Friday.

    The Caixin/Markit Manufacturing Purchasing Managers' index (PMI) rose to 50.1, in line with analysts' forecasts and slightly higher than August's no-change mark of 50.0, which separates expansion of activity from contraction on a monthly basis.

    The reading has bounced around the neutral 50 level for the best part of five years, pointing to stubbornly sluggish demand.

    Output expanded in September, but at the slowest pace in three months, the survey showed.

    Overall new orders also continued to show modest growth, with new orders edging into expansionary territory after nine months of contraction.

    Despite easing to its slowest for nine months, the rate of job shedding remained marked overall. Around 8 percent of companies surveyed reported lower headcounts, with a number of firms attributing the fall to cost-cutting.

    But companies were able to pass along higher input costs and raise selling prices of their goods by a sharper pace than in August, suggesting they were regaining pricing power.

    "The readings for the manufacturing PMI over the past three months seem to indicate that the economy has begun to stabilize," Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said in a note accompanying the PMI report.

    A construction boom fueled by government infrastructure spending and a housing market rally have helped to underpin growth in the world's second-largest economy in recent months, though small and mid-sized private firms like those which dominate the Caixin survey have continued to struggle.

    Profits earned by China's industrial firms grew the fastest in three years in August with rising sales, higher prices and reduced costs, official data showed on Tuesday.

    China's imports also unexpectedly rose in August for the first time in nearly two years, suggesting domestic demand may be picking up. Exports fell at a less than expected extent and showed signs of improvement, with demand from the United States, Japan and European Union all improving.

    But the Commerce Ministry warned on Thursday that downward pressure on China's trade is growing due to various destabilizing factors, and said weak global demand is "impossible" to reverse fundamentally this year, though January-August trade figures showed positive signs.

    Zhong also cautioned that an increasingly strained fiscal budget could pose a risk to sustainable growth.

    "Given that the growth rate of fiscal income has slowed recently while expenditures have swung, there is insufficient momentum to drive future economic growth, and there is a risk that industrial output may decline," Zhong said.

    China will release its official factory and service sector activity readings on Oct. 1.

    http://www.reuters.com/article/us-china-economy-pmi-idUSKCN120069
    Back to Top

    The Islamic State Loses Control Of Iraqi Oil Fields


    The Islamic State will have to turn to other means to finance terror activities now that it no longer controls oil wells in Iraq.

    Iraq’s oil ministry announced that IS was driven out of Shirqat—an area near Kirkuk—by U.S. backed Iraqi forces last Thursday. In August, IS lost the Qayyara oilfield south of Mosul in a push by the government retake the city. While the Iraqi government has not captured the Najma oilfield, it is of no use to the Islamic State, because the group cannot access the fields due to government airstrikes.

    According to Asim Jihad, “Najma has yet to be liberated because some sites are in the conflict zone. The reality is that it is extremely difficult to extract and smuggle oil while our forces are advancing towards Mosul...," Provincial security official Muthana Jbara noted. Without the income provided by the oilfields, the Islamic State will have to finance it activities through other means, such as increasing fines and taxes in the areas which it still controls.

    The Islamic State has lost a great deal of the territory in Syria and Iraq, over which it proclaimed a caliphate in 2014. Despite the losses which came during offensives backed by the United States, IS still controls oil wells in Syria.

    As to the push to retake Mosul, A U.S. official said this week that United States is ready to provide more military personnel for the effort, stating: “In consultation with the government of Iraq, the U.S. is prepared to provide additional U.S. military personnel to train and advise the Iraqis as the planning for the Mosul campaign intensifies," Iraqi Prime Minister Haider al-Abadi, the country’s Prime Minister said ,“American President Barack Obama was consulted on a request from the Iraqi government for a final increase in the number of trainers and advisers under the umbrella of the international coalition in Iraq,”

    http://oilprice.com/Latest-Energy-News/World-News/The-Islamic-State-Loses-Control-Of-Iraqi-Oil-Fields.html?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price.com+Daily+News+Update%29
    Back to Top

    Inner Mongolia outbound power transmission down 3.8% over Jan-Aug


    Inner Mongolia autonomous region, a major power generation base in China, transmitted 92.2 TWh of electricity to other areas in the first eight months this year, ranking first in China over the same period, according to data from the Inner Mongolia Development and Reform Commission.

    It was, however, 3.8% lower than the year-ago level, compare with a year-on-year decline of 5.7% over January-July, data showed.

    Of the total transmitted electricity, 56.12 TWh of electricity were sent to northern China over January-August, falling 5.8% on year; 180 GWh to Ningxia, down 24.5% from a year ago; 1.04 TWh to Shaanxi, down 39.4% on year.

    Meanwhile, the autonomous region transmitted 33.73 TWh of electricity to eastern China, rising 1.6% on year, while that was sent to the neighboring Mongolia stood at 740 GWh, up 3% on year.

    Inner Mongolia transmitted 400 GWh of electricity to Shanxi province, unchanged from a year ago.

    In 2015, the installed capacity of power generation in Inner Mongolia totaled 64.58 GW, which is expected to rank first in China to reach 100 GW over the 13th Five-Year period (2016-2020).

    As such, the outbound power transmission capacity of Inner Mongolia is likely to reach 62.3 GW, and 350 TWh of electricity will be transmitted outside the region annually.

    http://www.sxcoal.com/news/info?lang=en&id=4547726
    Back to Top

    German Cal 17 forward power prices at 2016 to date high on generation costs, tight supply


    European forward power prices continued their rally Thursday after posting some of the biggest single-day gains since the Fukushima nuclear crisis in the previous session on renewed concern about low nuclear availability in France coinciding with bullish coal and gas and carbon allowances.

    German baseload power for year-ahead delivery, the benchmark for European power, was heard trading at Eur30.50/MWh during the morning, but fell back to Eur29.80/MWh just before noon London time, still up some 70 euro cent from Wednesday's close, when the contract rose over 5%, Platts data shows.

    The contract has rebounded over 20% since a dip below Eur25/MWh on September 12 and is up almost 50% from record-lows of just over Eur20/MWh back in February.

    German year-ahead power prices have fallen continuously over recent years, more than halving from over Eur60/MWh in the wake of the Fukushima nuclear crisis and fell below Eur30/MWh last September for the first time in over 10 years before the slump in global commodity prices caused it to plunge to just Eur20/MWh in early 2016.

    The key driver of the recovery is coal prices, which have rebounded some 75% from their lows back in March, trading Thursday at $64.50/mt, a level not hit since late 2014 and up over $4 since the start of the week on tight supply in the Asian market.

    EUA carbon allowances, which dropped to a three-year low in the wake of the Brexit referendum, even falling below Eur4/mt at the start of September are ending the month over 25% higher, trading Thursday as high as Eur5.37/mt.

    SUPPORT FROM FRENCH NUCLEAR CONCERNS

    However, power prices are also driven by tightening supply, with the French power market most impacted by very low nuclear availability amid additional inspections needed at 18 of the 58 French reactors.

    France's EDF last Wednesday announced extended outages and cut its nuclear production targets for the remainder of this year as well as 2017, giving French and neighboring power markets a strong boost with the system tightness especially visible during the winter months and quarters.

    Last week, the French year-ahead contract registered its biggest weekly gain since 2010, up by over Eur3.

    On Wednesday, however, the contract jumped another Eur3 or almost 9% to levels not seen in over a year with another Eur1 added Thursday morning and the contract trading at Eur39.30/MWh, up by 25% in less than three weeks.

    French year-ahead power reached a record-low at Eur25.60/MWh on March 15 and has risen over 53% since.

    Sources said the market has not experienced such a strong period of gains since the Fukushima crisis in 2011 not only lifted global commodity prices but also tightened supply with Germany shutting its oldest reactors immediately, removing some 7 GW from the market.

    Traders also point to the fact that record lows seen earlier this year were overdone amid a complete lack of risk priced into forward power contracts.

    The French nuclear issues are now seen as additional risk coinciding with tighter supply following coal plant closures and a rising price scenario for fuels and with the market still changing from generally being short, leading to such sharp gains as well as increasing volatility overall.

    GAS STILL BEARISH AHEAD OF WINTER The exception remains European gas prices which have recovered far more slowly than coal prices and Dutch TTF Cal 17 gas up barely 20% since reaching multi-year-lows in April, trading Thursday at Eur15.80/MWh.

    The decoupling of coal and gas prices this summer has already led to a reversal of generation margins in Germany with modern CCGT gas-fired power plants on-par with older coal-fired plants for the first time in over five years for the front-month.

    The onset of winter and higher gas prices are set to reverse the near-term trend, but the year-ahead German clean-dark spread is now trading at its highest in almost five years. Initially, the trend in favor of gas plants over coal plants had a bearish impact on emissions, with coal on average twice as carbon-intensive as gas, but the increased shortfall of emissions-free nuclear output across Europe may actually increase emissions from power generation in the CWE region this year boosting EUA prices ahead of the agreed introduction of the Market Stability Reserve from 2019.

    http://www.platts.com/latest-news/coal/london/german-cal-17-forward-power-prices-at-2016-to-26557596

    Attached Files
    Back to Top

    Oil and Gas

    Iraq's OPEC revolt shows Saudi-Iran oil deal fragility


    For years, debates in the OPEC conference room were dominated by clashes between top producer Saudi Arabia and arch-rival Iran.

    But as the two managed to find a rare compromise on Wednesday - with Riyadh softening its stance towards Tehran - a third OPEC superpower emerged.

    Iraq overtook Iran as the group's second-largest producer several years ago but kept its OPEC agenda fairly low-profile. On Wednesday, Baghdad finally made its presence felt.

    What it did, however, pleased neither Saudi Arabia nor Iran.

    Iraq's new oil minister Jabar Ali al-Luaibi told his Saudi and Iranian counterparts, Khalid al-Falih and Bijan Zanganeh, in a closed-door gathering in Algiers that "it was an OPEC meeting for all ministers", a source briefed on the talks said.

    Luaibi also said he didn't like the idea of re-establishing OPEC's output ceiling at 32.5 million barrels per day (bpd), according to sources in the Organization of the Petroleum Exporting Countries.

    Reviving a ceiling, abandoned a year ago because of a Saudi-Iranian clash, was seen by some members as crucial in helping OPEC manage a vastly oversupplied market and prop up prices that stand well below the budget needs of most producers.

    But Luaibi told the meeting the new ceiling was no good for Baghdad as OPEC had underestimated Iraq's production, which has soared in recent years.

    Confusion followed, according to sources, and after a debate OPEC chose to impose a ceiling in the range of 32.5-33.0 million bpd - a decision dismissed by many analysts as weak and non-binding. OPEC's current output stands at 33.24 million bpd.

    As ministers including Falih and Zanganeh emerged smiling from the room and praised OPEC's first output-limiting deal since 2008, Luaibi called a separate briefing to complain about OPEC's estimates of Iraqi output.

    "These figures do not represent our actual production," he told reporters. If by November estimates do not change, "then we say we cannot accept this, and we will ask for alternatives".

    Luaibi went even further and asked a reporter from Argus Media - whose data OPEC uses among other sources to compile estimates of countries' production - to disclose from where Argus' estimates were coming.

    "Your sources are not acceptable. And if there is deviation from the government, then Argus will not work in Iraq," Luaibi told the Argus reporter.

    DIFFICULT NEGOTIATIONS AHEAD

    Luaibi's revolt shows the fragility of the OPEC deal.

    Between now and November, when OPEC meets formally in Vienna, the group will have to overcome huge obstacles to agree a binding deal.

    Key among them will be to establish at least some semblance of country quotas to make sure members limit global oversupply, which has helped halve prices since 2014 to below $50 a barrel.

    Iran insists it wants to raise output to around 4 million bpd as it emerges from European sanctions. The Saudis have proposed that Iran freeze production at 3.7 million bpd.

    Riyadh is offering to cut its own production to 10.2 million bpd from 10.7 million but most analysts argue it will fall to such a level anyway as the summer heat eases, reducing the need for cooling.

    Iraq has seen spectacular gains in output in recent years and is asking oil majors to expand production further to above 5 million bpd from the current 4.7 million.

    "The deal is a bit of a farce," one OPEC source said.

    A source familiar with Iranian thinking said it was still positive that an agreement had been reached: "No one will offer anyone a free ride. Technical committees will work out details."

    For Michael Wittner, head of oil research at Societe Generale, the decision shows Saudi Arabia is turning its back on letting the market manage supply.

    "It remains to be seen how many real barrels will be removed from the market. To me, the significance is way beyond that: they all sat down in a room and made a decision."

    http://www.reuters.com/article/us-opec-meeting-iraq-idUSKCN11Z1JH
    Back to Top

    Libya AGOCO says output at 290,000 bpd, aims for 350,000 by year end


    Libya's Arabian Gulf Oil Company (AGOCO) has increased production to 290,000 barrels per day, its chairman said on Thursday, and hopes to reach 350,000 bpd by the end of the year.

    AGOCO, a subsidiary of the National Oil Corporation (NOC) that operates mainly in eastern Libya, has boosted its output from about 150,000 bpd since military commander Khalifa Haftar took control of some of the country's main oil terminals from a rival force on Sept. 11-12.

    Following the takeover, the NOC opened three previously blockaded ports. On Thursday an official at one of the ports, Zueitina, said a tanker had entered to load 570,000 barrels of crude to take to Zawiya refinery in western Libya.

    Clashes, protests and political disputes slashed Libya's oil output to a fraction of former levels. The OPEC member was producing about 1.6 million bpd before the 2011 uprising that toppled long-time leader Muammar Gaddafi.

    NOC Chairman Mustafa Sanalla has said he hopes the opening of the ports can be a turning point. But major pipelines in western Libya are still blockaded and Libya remains politically and militarily divided.

    Ibrahim Alawami, head of the NOC's measurement department, said on Thursday national production was between 450,000 and 490,000 bpd and would rise to about 500,000 bpd by the end of the month.

    AGOCO Chairman Mohamed Shatwan told Reuters the company's production should reach 300,000 bpd in the coming days, barring any technical problems, adding a further 50,000 bpd by the end of 2016.

    "We have an ambitious plan under which it is possible after a period to reach 400,000 bpd," he added, saying it might take up to two years to achieve that goal.

    Damage to AGOCO's fields from militant attacks over the past two years was limited, he said.

    Of AGOCO's five major fields Bayda remains shut because of a technical problem at Ras Lanuf, and production at Nafoura is limited to 22,000 bpd, about half of its capacity, because maintenance work and parts are needed, said Shatwan. A storage tank in Messla field that was damaged in 2011 has remained unrepaired because of the evacuation of foreign workers.

    "We ask on this occasion that foreign companies return to work and carry out operations to check security, and if they do not return we will have to find another solution," he said.

    Of the ports seized by Hangar's forces, Zueitina had been closed since late last year, while Ras Lanuf and Es Sider ports had been shut since 2014. The first tankers docked at Ras Lanuf last week, but Es Sider, badly damaged in fighting, needs repairs before exports can resume.

    Exports have continued at a reduced level at Brega, the fourth port now under Haftar's control.

    Hariga terminal in the far east of Libya, which is operated by AGOCO, has kept working relatively smoothly. Shatwan said 56 or 57 tankers had loaded there so far this year, compared to 90 tankers during the whole of 2015.

    http://www.reuters.com/article/libya-security-oil-idUSL8N1C54J2
    Back to Top

    Satellite Data Show China May Have Stored More Crude Than Estimated


    China, the world’s largest energy consumer, may have stored more oil than official estimates, according to an analysis of satellite images by Orbital Insight Inc.

    Oil in storage was about 600 million barrels as of May, according to the geospatial analytics startup based in Palo Alto, California. There were about 2,100 strategic and commercial petroleum reserve tanks capable of storing 900 million barrels as of the end of 2014, according to calculations derived from photos tracking the depth of shadows visible on top of the floating lids of the giant tanks. They don’t include underground caverns.

    The estimates exceed projections from forecasters including Energy Aspects Ltd., and help shed light on oil reserves that puzzle commodities traders worldwide. China’s record purchases this year have helped oil prices recover from the worst crash in a generation. The findings are also the latest example of how private technology firms are using big data and machine learning to better measure the second-largest economy, where some official data are incomplete and private gauges have vanished without explanation.

    "I’m not surprised," Michal Meidan, an analyst with London-based consultancy Energy Aspects, said of Orbital’s estimate, adding that her number is over 400 million including both strategic and commercial stocks. "There is more storage available in China than the market is willing to acknowledge. Any information around this is valuable. There seems to be quite a bit of flexibility between commercial strategic storage tanks, even though official statistics do not account for all of it.”

    Oil Storage

    China held 301 million barrels in seven national oil storage cities as of end-2015, with a combined capacity of 442 million barrels, according to Jason Lohn, Orbital’s head of core engineering. The company mapped tank locations that may differ from those the government has acknowledged in Dalian, Dushanzi, Huangdao, Lanzhou, Tianjin, Zhenhai and Zhoushan.

    Orbital’s figure is larger than China’s official estimates for strategic petroleum reserves and for commercial stocks, which are published each month by the official Xinhua News Agency’s China Oil, Gas & Petrochemicals newsletter, said Orbital Chief Executive Officer James Crawford. Nobody replied to a fax to China’s National Energy Administration Thursday seeking comment on Orbital’s estimates.

    In a rare release this month, China reported adding about 43 million barrels of crude to its strategic reserves between mid-2015 and early this year. Reserves totaled 31.97 million tons in early 2016, equivalent to about 234 million barrels, the National Bureau of Statistics said in a statement that was the first government update on reserves since December.

    Emergency Stockpiles

    Emergency stockpiles of the second-biggest oil user have been a source of speculation among analysts and traders, who rely on customs figures and infrequent construction updates to estimate how much of the country’s imports go into strategic inventories, and for how long they will continue to fill.

    China’s overall storage is about 60 percent full, “and it’s probably actually less than that because there’s probably a fair amount of new capacity since the end of 2014 that’s not yet included,” said Crawford, a former NASA scientist and Google engineer who founded the company. “It’s definitely higher than Chinese official estimates. There are some slightly higher numbers for SPR, and there are some folks who feel the Xinhua numbers may slightly understate the commercial.”

    Orbital has received funding from Google Ventures, Sequoia Capital, and Bloomberg Beta, the venture-capital unit of Bloomberg LP.

    http://www.bloomberg.com/news/articles/2016-09-29/satellite-data-show-china-oil-reserves-may-top-official-estimate

    Attached Files
    Back to Top

    Russia's Lukoil CEO says not ready to reduce oil output - RIA


    Lukoil, Russia's second biggest oil producer, is not ready to reduce its oil output but will join oil market stabilisation measures if Russia joins them, RIA news agency quoted Lukoil Chief Executive Vagit Alekperov as saying.

    TASS news agency also cited Alekperov as saying that all Russian oil producers could sign a protocol on stabilising oil production. It later clarified in Alekperov's quote that he was talking about the need to sign such a protocol in case Russia decides to join the process of output stabilisation.

    Oil producers' cartel OPEC agreed on Wednesday to limit its output to 32.5-33.0 million barrels per day (bpd) to prop up weak crude prices.

    http://www.reuters.com/article/opec-meeting-russia-lukoil-idUSR4N1BY02O
    Back to Top

    Nigerian militant group claims attack on oil pipeline in Niger Delta


    Attacks on Nigeria's energy facilities by groups calling for the Delta region to receive a greater share of the OPEC member's oil wealth have cut crude production, which stood at 2.1 million barrels per day at the start of the year, by a third.

    The Niger Delta Greenland Justice Mandate said it bombed the Unenurhie-Evwreni delivery line in Ughelli, Delta state, at around 01:00 a.m. (0000 GMT) on Thursday. The line is operated by NPDC, a subsidiary of NNPC.

    A military source said dynamite was used to blow up the pipeline. An NNPC spokesman could not immediately be reached for comment.

    It comes days after Niger Delta Avengers, which has claimed responsibility for most of the attacks on energy facilities in the region since the start of the year, said it carried out its first attack since declaring a break in hostilities in August to pursue talks with the government.

    The Avengers said on Saturday there had been no progress in meeting their demands.

    The Greenland Justice Mandate, which has never agreed to cease hostilities, said in a statement it had blown up the pipeline "to prove to the wicked and ungrateful multinational oil companies and their Nigerian military allies... that we own our lands".

    http://www.reuters.com/article/us-nigeria-oil-idUSKCN11Z0XE
    Back to Top

    Angola LNG resumes production


    The $10 billion Angola LNG project, led by U.S. energy giant Chevron, has resumed production following a planned two-month shutdown.

    “I can confirm that Angola LNG has resumed production and sales of LNG from its plant in Soyo,”  an Angola LNG spokeswoman told LNG World News on Thursday.

    The 5.2 million tons per year liquefaction plant was shut down in July as part of the restart and commissioning programme.

    To remind, the facility was closed for more than two years due to a major rupture on a flare line that occurred in April 2014.

    It restarted operations again in May with four cargoes shipped from the facility until the maintenance began in July.

    Angola LNG is a joint venture between Sonangol (22.8%), Chevron (36.4%), BP (13.6%), Eni (13.6%), and Total (13.6%).

    http://www.lngworldnews.com/angola-lng-resumes-production/
    Back to Top

    What’s in the Pacific NorthWest LNG conditions?


    Now that the federal government has approved Pacific NorthWest LNG, the controversial gas liquefaction facility on Lelu Island, the devil is in the details.

    On Sept. 27. the federal government imposed 190 conditions on the $11.4 billion plant, which would refine gas from Northeast B.C. for shipment to Asia.

    The conditions include rules for construction and operations around Flora Bank, a sensitive salmon habitat, as well as a cap on total emissions from the project.

    Federal conditions also create environmental monitoring committees “comprised of Indigenous peoples and federal and provincial representatives, for the first time ever,” Environment Minister Catherine McKenna said at a news conference in Richmond.  

    Some, including Northeast B.C. MP Bob Zimmer, said the conditions could be designed to make the project unfeasible—potentially avoiding a political headache for Justin Trudeau's Liberals.    

    While Pacific NorthWest can now move forward, Malaysian energy giant Petronas and its partners still need to review the project to see if it makes economic sense under the conditions.

    “Approving this project is one thing, building it is completely another,” Zimmer said in the House of Commons Sept. 28. “Why did the Liberals put potential poison pills in the approval with unnecessary conditions?”

    Many of the conditions aim to prevent impacts on fisheries. Among the concerns are that the project’s around-the-clock construction schedule could create 24-hour daylight conditions for nearby salmon populations.

    The 190 conditions include:

    -limiting underwater pile driving noise to 207 decibels to avoid impacts on fish
    -restrictions on lighting during construction, including a requirement to “place -reflective material on the underside of over-water infrastructure to reduce the light/dark contrast on marine waters.”  
    -fisheries assessments for Northern Abalone and other species, as well as followup monitoring  
    -specific emissions intensity guidelines on each LNG “train” to minimize impacts on air quality

    B.C. has also agreed to support the upcoming federal climate change plan, and has committed to raising its $30 a tonne tax on carbon concurrently with other provincial governments.

    Warren Brazier, an energy lawyer with Watson Goepel, said emissions will likely be the biggest hurdle for the project going forward.

    - See more at: http://www.dawsoncreekmirror.ca/regional-news/lng/what-s-in-the-pacific-northwest-lng-conditions-1.2355063#sthash.Ky6rQr1B.dpuf
    Back to Top

    Dallas Fed Reserve Provides Optimistic Local Energy Outlook

    Dallas Fed Reserve Provides Optimistic Local Energy Outlook

    The energy woes for one of the main oil producing areas of the United States may be a thing of the past, according to the latest quarterly report from the Dallas Federal Reserve.

    The survey encompasses upstream energy firms located or headquartered in the Eleventh Federal Reserve District, which includes Texas, southern New Mexico, and a portion of Louisiana. It includes the Barnett Shale, Eagle Ford, Haynesville Shale, and the Permian Basin.

    “Results suggest conditions were improving again in the third quarter,” Michael Plante, senior research economist and project manager for the latest Dallas Fed Energy Survey said in an interview the Midland Reporter-Telegram.

    Nearly 62 percent of the 149 respondents to the survey believe that the price of oil, which has plummeted since 2014, will increase a year from now. At least 90 percent feel the West Texas Intermediate price must surpass the US$55 per barrel mark.

    Most of those surveyed anticipate a notable increase in drilling activity, particularly in the second quarter of 2017.

    A plurality of 48 percent of respondents from the report published on September 26th is also optimist over the price of natural gas.

    Energy firms also reported a 25 percent spike in equipment utilization as well as a continued fall in the prices of services.

    Despite the bright indicators, other factors were not so positive.

    Production for oil and natural gas dropped for the third straight quarter, albeit a slower rate than previous periods. Jobs in the sector continued to be shed, while the employee indices for hours and wages plus benefits continued in the red.

    “Based on the survey itself, (respondents) are saying the worst is over. But one thing I would point out, the comments told us there is uncertainty about recent price weakness and continued oversupply,” Plante said.

    “The comments suggest people are still uncertain, but even if they’re uncertain, they think things will be better next year,” he added.

    http://oilprice.com/Latest-Energy-News/World-News/Dallas-Fed-Reserve-Provides-Optimistic-Local-Energy-Outlook.html?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price.com+Daily+News+Update%29

    Attached Files
    Back to Top

    KKR and Venado Form Partnership to Pursue Oil and Gas Investments in Eagle Ford Shale


    KKR and Venado Oil and Gas, LLC today announced a partnership to consolidate proven assets in the Eagle Ford Shale of South Texas. The partnership is principally funded by KKR’s Energy Income and Growth Fund I (“EIGF”).

    Venado is led by CEO Scott Garrick and a core team of individuals who have operated in the Eagle Ford since the play’s inception. Venado intends to apply its expertise to acquire and enhance Eagle Ford assets through a focus on operational efficiency, technical innovation and strong community relations.

    David Rockecharlie, Member and Head of Energy Real Assets (“ERA”) for KKR, stated, "We have known Scott for many years and believe he and his team have the experience and differentiated business approach necessary to acquire attractive Eagle Ford assets and enhance long-term value through superior technical and operational execution. KKR has a long history investing in the Eagle Ford, and we look forward to expanding our existing Eagle Ford asset position in partnership with Venado.”

    Scott Garrick, CEO of Venado, added, "We are excited to partner with KKR in the Eagle Ford, where we both see the opportunity to build a large scale, long-term business. Both Venado’s management and KKR have been active in the Eagle Ford since the early phase of development, and we share the same vision of the next phase of its evolution. This provides an ideal foundation for a strong partnership.”

    Venado’s business plan is a natural fit within KKR ERA’s asset-based investment strategy that provides flexible capital solutions to upstream operators. KKR has made more than ten investments in the Eagle Ford to date. KKR ERA manages a portfolio of oil and gas assets in numerous unconventional and conventional resource areas across the United States, including developments in the Eagle Ford, Bakken, Barnett, DJ, Haynesville, Marcellus, Permian and Utica.

    http://www.businesswire.com/news/home/20160929005397/en/KKR-Venado-Form-Partnership-Pursue-Oil-Gas
    Back to Top

    Rice Energy Ramps Up Leasing Activity in Greene County, PA


    Earlier this week MDN brought you the dynamite news that Rice Energy is buying out Vantage Energy for $2.7 billion.

    The reason Rice bought Vantage was largely because of 85,000 acres of Marcellus leases in Greene County, PA. What we had overlooked was the fact that 27,000 of the 85,000 acres in Vantage’s Greene County portfolio was acreage they just bought from bankrupt Alpha Natural Resources.

    Rice had bid $200 million for that acreage, but Vantage came along and got it for $339.5 million.

    Now that Rice has locked up the Vantage acreage in addition to its own considerable holdings in Greene County, what’s left to do?

    Lease more unleased acreage in Greene. Rice says there is between 20,000-40,000 unleases acres in Greene and the company is full speed ahead trying to get that acreage signed up for themselves. Note to Greene landowners: expect a landman on your doorstep soon…

    http://marcellusdrilling.com/2016/09/rice-energy-ramps-up-leasing-activity-in-greene-county-pa/
    Back to Top

    Extraction Oil & Gas expects to raise as much as $600 mln in IPO


    Extraction Oil & Gas LLC said it expected to raise as much as $600 million in an initial public offering, valuing the Denver-based oil explorer and producer at about $2.6 billion.

    The company, based in Colorado's Denver-Julesburg basin and backed by private equity firm Yorktown Partners LLC, said it expected to price the offering of 33.3 million shares at between $15 and $18 each. (bit.ly/2dGcgVT)

    Private equity backers are looking to sell some or all of their investments in energy companies after oil prices rebounded slightly from 12-year lows hit early this year.

    Extraction Oil & Gas said it would list itself on the Nasdaq under the symbol "XOG" and would be called Extraction Oil & Gas Inc after it goes public.

    The company intends to use proceeds from the offering to pay back debt and for general corporate purposes.

    Credit Suisse Securities (USA) LLC, Barclays Capital Inc and Goldman Sachs & Co are among the underwriters to the offering.

    http://www.reuters.com/article/extractionoilgas-ipo-idUSL3N1C53IX
    Back to Top

    Chesapeake hit with DOJ subpoena


    US independent Chesapeake Energy has said it has entered "discussions" with the US Department of Justice after receiving a subpoena seeking information on the company's accounting practises.

    http://www.upstreamonline.com/live/1445605/chesapeake-hit-with-doj-subpoena?utm_source=twitterfeed&utm_medium=twitter
    Back to Top

    US LNG cargo lands in Turkey, first market with direct Russian competition


    A third cargo of US LNG has arrived on European shores, the Sestao Knutsen earlier this week unloading at the Turkish LNG import terminal at Aliaga.

    The tanker was one of the last to load at Cheniere Energy's Sabine Pass export facility in the Gulf of Mexico before the two-train plant was shut down for planned maintenance in mid-September.

    The arrival of US LNG into Turkey marks a step change in flows into Europe.

    The previous two cargoes were both delivered to the Iberian Peninsula -- the first in April to Portugal and the second this summer to Spain.

    Neither country is supplied with pipeline gas by Gazprom.

    But the start of US LNG exports to Turkey is arguably of more importance given that Russia supplies significant volumes of gas to the Turkish market.

    In the first half of 2016, Gazprom piped 12 Bcm of gas to Turkey, making it the Russian company's third biggest customer after Germany and Italy.

    Turkish relations with Russia deteriorated sharply at the end of last year with the downing by Ankara of a Russian fighter jet near the Syrian border.

    But following an apology for the incident by Turkish President Recep Tayyip Erdogan, ties were mended and the two sides began to work quickly on realizing the planned TurkStream gas pipeline from Russia to Turkey.

    US LNG exports to Europe remain a rarity -- of the now 31 cargoes loaded since exports began in February, it is only the third.

    But one other LNG tanker from Sabine Pass is currently in European waters -- outside the bunkering port of Kalamata in Greece.

    The Maran Gas Delphi arrived at Kalamata on Monday, but its next destination is as yet unclear.

    The majority of US LNG cargoes have gone to South America. But cargoes have also been shipped to China, India, the Middle East and recently to Mexico and the Dominican Republic.

    Delegates speaking at the S&P Global Platts European Gas Summit in Dusseldorf this week were not optimistic about the chances of US LNG making waves on the European market given the low cost Russian gas alternative.

    "It will not be a tsunami of US LNG [in Europe]", Vattenfall's Head of Continental Power Trading Frank van Doorn said.

    BP's Head of Russia & CIS Economics Vladimir Drebentsov added: "Russian gas production costs are very low, among the cheapest in the world. My thinking is that Gazprom will undercut US LNG -- letting the [US)] LNG set the price."

    http://www.platts.com/latest-news/shipping/london/us-lng-cargo-lands-in-turkey-first-market-with-26557391

    Attached Files
    Back to Top

    Tundra buys Saskatchewan system


    Canada’s Tundra Energy Marketing has struck a nearly C$1.1 billion (US$816.8 million) deal to buy a regional pipeline system from an affiliate of Enbridge Income Fund.

    http://www.upstreamonline.com/live/1445620/tundra-buys-saskatchewan-system?utm_source=twitterfeed&utm_medium=twitter
    Back to Top

    Alternative Energy

    Renault says new Zoe has longest range of any mainstream electric car


    Renault has unveiled a new electric car that it claims will overcome psychological barriers among drivers who fear running out of power between charges.

    Launched on Thursday ahead of the Paris motor show, the latest Zoe model will have the longest range of any mainstream electric vehicle, the French carmaker said.

    Comparisons will inevitably be drawn with US-headquartered Tesla, whose models match the Zoe’s 250-mile (400km) battery, but Renault said it was competing for a different market. Most mainstream electric cars, such as those by BMW and Nissan, have a range of 100-150 miles.

    “We are breaking psychological barriers with the range ... 300km [186 miles, the car’s expected range in suburban environments] is a real threshold in the mind of the people,” said Eric Feunteun, vice-president of Renault’s electric vehicle programme.

    “We are offering the same range as Tesla for a totally different price. I don’t consider Tesla as an issue; Tesla is a good thing because they create a good image for electric vehicles and because people like to have choices.”

    Electric cars could be charged at Shell service stations from 2017

    The car’s battery, made in partnership with LG, has nearly twice the capacity, employs different chemistry and weighs twice as much as the battery in the original Zoe, which had a range of 149 miles.

    “This is a real breakthrough,” said Feunteun. “It’s quite simple to understand but not simple to do – to put twice as much energy in the same box.”

    He said that although some countries, such as the UK, were reducing their subsidies for the greener cars, pressures like the Paris climate agreement meant more governments were still pouring more money into supporting them.

    “At this stage in 2016 the incentives are growing in Europe. Germany has started, part of Belgium started. We have not yet reached the highest point of incentives,” Feunteun added.

    There are now around 1.26m electric cars worldwide, up from 6,000 in 2009. Feunteun said growth had been robust because of customer satisfaction with the vehicles and because technological advances were happening faster than expected.

    “But the reality is today that, for energy companies, electric cars are an opportunity, to help the grid store electricity and regulate it. With the growth of unstable [intermittent] sources of energy like wind and solar, you need some buffer behind it, and those electric cars can be those buffers.”

    The new Zoe will be delivered to UK drivers in November and is expected to sell for around £17,000 from Saturday after a £4,500 government grant.

    https://www.theguardian.com/environment/2016/sep/29/renault-says-new-zoe-has-longest-range-of-any-mainstream-electric-car

    Attached Files
    Back to Top

    Eni agrees renewables energy deal with Egypt


    * Italian oil major Eni has agreed a common strategy with Egypt to build renewable energy projects in the country, the company said on Thursday.

    * The first project will be a solar plant in Sinai with a maximum output of 50 megawatts. Construction is expected to be sanctioned next week and completed by the end of 2017.

    * The project is part of Eni's push into green energy, with the aim of bringing 420 megawatts of mostly solar power generation online by 2022.

    * Eni, the owner of the massive Zohr gas field expected to start production next year, currently produces about 210,000 barrels of oil equivalent per day in Egypt.

    http://uk.reuters.com/article/eni-egypt-renewables-idUKL8N1C52VL

    Attached Files
    Back to Top

    Lynas warns on debt in low-price environment


    The high level of debt on Lynas’s balance sheet continues to be a challenge in the low-price environment, the lossmaking rare earths miner said on Thursday.

    The company raised caution about its ability to meet itsfinancial obligations and stated that it would require either amendments to the terms of its loan facilities or alternative sources of funding. Lynas said it was in negotiations with its lender groups regarding amendments.

    “In this low price environment, the Lynas business has been approximately break-even on a free cash-flow basis for several quarters, and accordingly, the high level of debt on the Lynas balance sheet remains a challenge. Throughout thefinancial year, our lenders have continued to support the businesses.”

    Lynas flagged price volatility, production levels, foreign currency exchange rates and the regulatory environment as risks to its ability to continue as a going concern.

    The miner, however, reported that it was implementing strategies to mitigate the effect of the low-market pricing, including continuing to focus on opportunities to further reduce operating costs.

    Lynas is operating the Mt Weld mine, in Australia, and theLynas Advanced Materials Plant, in Malaysia. The group achieved sales revenue of A$196.1-million in the 2016financial year, reflecting increased production volumes and strong relationships with customers in Japan and China.

    The miner narrowed its loss from A$118.6-million to A$94.1-million in the year ended June 30.

    http://www.miningweekly.com/article/lynas-warns-on-debt-in-low-price-environment-2016-09-29
    Back to Top

    Uranium

    Report Says 28 Nuclear Plants Operate At Risk Of Failure


    A report commissioned by Greenpeace France has found that 28 nuclear reactors, including 18 EDF plants in France and one in the UK’s Sizewell, are operating at risk of failure due to carbon anomalies, environmental affairs magazineEcologist reports.

    Consultancy firm LargeAssociates carried out the review after French regulators had found flaws in a reactor vessel at the EPR reactor currently under construction at Flamanville. The key parts for the reactor construction have been provided by the French nuclear engineering group Areva.

    Last week, France’s nuclear safety watchdog, ASN, publishedthe list of the irregularities for which Areva had notified it so far, concerning items manufactured by Areva’s Creusot Forge plant for French civil nuclear activities. After an anomaly was detected in the Flamanville EPR reactor vessel at the end of 2014, ASN asked Areva to carry out a quality review at its Creusot Forge plant.

    “To date, Areva NP has identified 87 irregularities concerning EDF reactors in operation, 20 affecting equipment intended for the Flamanville EPR reactor, one affecting a steam generator intended for but not yet installed in the reactor 5 of Gravelines NPP and 4 affecting transport packagings for radioactive substances,” the French nuclear safety regulator said.

    In the report commissioned by Greenpeace, the authors at LargeAssociates say:

    “The same Creusot manufacturing route used for the already installed but yet to be commissioned FA3 RPV, was also used for and, hence, the same flaws are very likely to arise in the two Taishan, China EPR NPPs presently nearing commissioning, and future orders such as Hinkley Point C EPR.”

    This is potentially very bad news for Hinkley Point, which received two weeks ago the approval of the UK government after much controversy and long delays.

    http://oilprice.com/Latest-Energy-News/World-News/Report-Says-28-Nuclear-Plants-Operate-At-Risk-Of-Failure.html?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price.com+Daily+News+Update%29
    Back to Top

    Namibia’s new uranium mine to triple country’s output by 2017


    Namibia’s uranium output is expected to triple by 2017, becoming the world’s third largest producer of the commodity, as the massive Husab mine begins production next month.

    According to Swakop Uranium, the company that owns the $2-billion project, the mine will produce up to 15-million tonnes of uranium a year.

    Namibia is the world’s sixth biggest uranium producer, behind Kazakhstan, Canada, Australia, Niger and Russia. But the new mine could help it climb to the third place.

    Output will be gradually increased to reach the installed capacity of 50-million tonnes of ore a year, Swakop's chief executive Zheng Keping told The Namibian.

    According to the country's central bank, production of uranium will increase 63% this 2016 and 90% in 2017, consolidating Namibia as one of the top producers of the commodity.

    Currently, the African nation is the world’s sixth biggest uranium miner, behind Kazakhstan, Canada, Australia, Niger and Russia.

    Cameco Corp, Canada’s biggest uranium producer, has been signalled in the past as potential buyer for offtake output from the Husab mine, which is considered the third largest uranium-only deposit in the world, with measured and indicated reserves of about 140,000 tonnes.

    Uranium mineralization was first discovered in the Namibia’s Rössing Mountains, Namib Desert, in 1928 by Capt. G. Peter Louw. Uranium exploration official started in 1960s with Rio Tinto obtaining exploration rights for the Rössing deposit in 1966. It started production in 1976.

    The Rössing mine is currently Namibia’s longest running and one of the world’s largest open pit uranium mines.

    http://www.mining.com/namibias-new-uranium-mine-triple-countrys-output-2017/

    Attached Files
    Back to Top

    Agriculture

    Louis Dreyfus profit weathers "erratic" commodities markets


    Agricultural trading group Louis Dreyfus Company B.V. managed to eke out a small increase in net profit in the first half of 2016 despite "erratic" market conditions and a tough economic backdrop taking their toll on sales.

    Louis Dreyfus, one of the traditional big four agricultural commodity traders, has been grappling with a period of ample supply, lower prices and slower economic growth that have cut margins, while also going through a leadership shake-up under main shareholder Margarita Louis-Dreyfus.

    The company said on Thursday that net income was $135 million compared with $130 million in the first half of 2015, while operating profit for its business segments fell to $546 million from $638 million as net sales dropped to $23.5 billion from $26.4 billion.

    Unexpected capital inflows in commodities in the second quarter added to the difficult trading conditions, it added.

    "Posting reasonable results during such periods and a context of continued oversupply illustrates our ability to adjust to changing conditions," Chief Executive Officer Gonzalo Ramirez Martiarena said in an interim results report.

    Louis Dreyfus is the "D" of the so-called ABCD quartet of trading giants, alongside Archer Daniels Midland, Bunge and Cargill, that collect, process and export crops around the world.

    The unfavourable landscape for commodity traders has led companies to restructure some activities.

    Louis Dreyfus said its shipped volumes increased 1 percent compared with the year-earlier period, supported by grain and oilseed exports from South America at its Value Chain segment and metals flows at its Merchandising segment.

    Capital expenditure was $132 million, close to the $135 million level in the first half of 2015.

    Dreyfus in March reported a plunge in net profit for 2015 and confirmed it was seeking partners to help some of its businesses expand, starting with its fertiliser division.

    It did not give any update on partnerships in its first-half report.

    Among its rivals, ADM said last month it was pulling back in ethanol and exploring sales of corn dry mills that produce the biofuel as weak ethanol results contributed to lower quarterly profits.

    http://www.reuters.com/article/louisdreyfus-results-idUSL8N1C23JX
    Back to Top

    Precious Metals

    Platinum mines finally taking drastic action – PwC report


    Profit margins on South African platinum mines dropped to 8.5% in 2016 from 9% in 2015 remaining at levels too low to be sustainable according to the latest report highlighting trends in the SA mining industry and produced annually by accounting firm PwC.

    By comparison, profit margins on the country’s gold mines rose to 26% from 24% over the same period as the gold producers benefitted from prior decisions taken to chop capital expenditure and close loss-making shafts.

    According to PwC energy and mining assurance partner Andries Rossouw a “realistic” margin level for the mining companies was above 30% and he added, “ a 9% margin is not sufficient to cover tax and borrowings, let alone capital expenditure.

    “It leaves the industry in a position where they cannot even incur sustaining capital expenditure at the moment. They need to fund it in different ways and that’s why you saw the number of equity raisings in the platinum sector over the past two years. They had to go back to the market to fund their operations. There was no other way.”

    Asked why the platinum mines had not reacted as rapidly as the gold mines to the grim market conditions Rossouw replied, “ they are taking those hard decisions now but most mining companies get caught in a balancing act between keeping a shaft open – because they think prices will go up in the future and it will cost more to re-open that shaft – and closing it down.

    “ We have reached a point now where everything is being closed down because they cannot sustain it going forward.”

    Rossouw pointed out the bulk of impairments made in the SA industry during 2016 were in the platinum sector which accounted for R47 billion of the total impairment charges of R60bn taken. In total, the SA mining industry has made impairments of R134bn over the past three years.

    According to the SA Mine report, in the platinum sector “a large portion of the cost base created before 2008 was not removed from the industry once prices had crashed. Although input costs grew at a rate closer to CPI they did not decrease proportionately.”

    The report said platinum has now been trading below average for 7.5 years and previous down cycles did not exceed nine years. PwC pointed out that, based on supplier-based real price averages, platinum is due for a recovery in rand terms.

    The report – which covered 27 of the 31 most important SA mining companies – found that the mining industry overall made a R46bn net loss for 2016 which was the first aggregated net loss since the start of the survey eight years ago. The survey also reported SA mining companies chopped dividends to R8bn in 2016 from R22bn in 2015.

    Rossouw said mining companies had now all realised that they could not just hope for prices to recover. He commented, “they have realised they have to do something themselves and they have taken the hardline actions in most commodities that the gold companies have done cutting their cloth to suit the low price environment. I think that’s a real positive coming out of this year’s performance.”

    http://www.miningmx.com/top-story/28103-platinum-mines-finally-taking-drastic-action-pwc-report/
    Back to Top

    Base Metals

    China aluminium officials at U.S. trade hearing urge dialogue in face of criticism


    A Chinese industry group making a rare appearance at a U.S. government hearing sought on Thursday to counter arguments that excess aluminium capacity in China threatened American and global producers and processors of the metal.

    Appearing at the end of a day of submissions at the U.S. International Trade Commission, the officials argued that China's aluminium industry had been a major contributor to the global economy.

    "We believe we can effectively address the global aluminium industry's challenges through dialogue and cooperation," officials from the China Nonferrous Metals Industry Association said in a submission.

    The hearing, part of an investigation requested by the House of Representatives Ways and Means Committee, heard from U.S., Canadian, European and Russian groups and companies involved in smelting, extruding and recycling. They argued that China's excess capacity was led by government policy and had caused lower prices worldwide.

    The Chinese trade group officials said their industry's development had been driven by domestic demand that was expected to grow as the metal was used in new applications such as railroad cars and overpasses. They added that Beijing had eliminated some inefficient capacity and was reducing investment in the sector.

    The arguments appeared in the face of a push by some U.S. industry members for Washington to impose countervailing or anti-dumping duties on some Chinese producers.

    The U.S. Department of Commerce is investigating China Zhongwang after the U.S. Aluminum Extruders Council alleged the company evaded U.S. import tariffs on aluminum extrusions.

    Extrusion is the process of shaping aluminum by forcing it to flow through an opening in a mould to make products for use in industries ranging from electronics to aerospace.

    U.S. industry and labor groups at the hearing also complained about the heavy use of coal to generate electricity to power most of China's smelters, a practice that appeared to be at odds with Beijing's promises to reduce greenhouse gas emissions.

    They also accused China of using third-country markets, including Mexico and Vietnam, and mislabeling primary aluminum as semi-fabricated metal, in an effort to evade high tariffs.

    The ITC, which has no power to enact trade sanctions, will eventually issue a report to the House panel.

    http://www.reuters.com/article/us-usa-aluminum-china-idUSKCN12004Z
    Back to Top

    Steel, Iron Ore and Coal

    Extreme pollution forces China to shut down hundreds of coal, steel operations


    China is stepping up its war on pollution by forcing hundreds of coal and steel companies to close or slash output in light of their transgressions to environmental and safety regulations.

    The country’s state planner said that after inspecting more than 4,600 coal mines it decided to revoke safety certificates for 28 of them and shut another 286 operations for not complying with environmental and safety regulations.

    The National Development and Reform Commission (NDRC) also ordered two steel firms to close permanently, 29 companies to suspend output and another 23 to reduce production, it said in the statement.

    After inspecting more than 4,600 coal mines, China's state planner revoked safety certificates for 28 of them and shut another 286 operations for not complying with environmental and safety regulations.

    China will also set up a no-coal zone in cities around Beijing in 2017 to try reducing the capital's hazardous smog levels. As an additional measure, the government will ban factories and households in 18 districts and towns of the Hebei province from both burning coal and building new power generators powered by petroleum coke, Xinhua News Agency reported.

    A study by Chinese and American researchers published last month blamed burning coal as the cause of premature death for about 366,000 people in 2013.

    According to the paper, produced by Tsinghua University in Beijing, one of China’s top research universities, in collaboration with Boston-based Health Effects Institute, coal is responsible for 40% of the deadly fine particulate matter known as PM 2.5 in China’s air.

    The study attributed 155,000 deaths in 2013 related to ambient PM 2.5 to industrial coal burning, and 86,500 deaths to coal burning at power plants.

    But coal consumption in China has decreased since then. In December, Beijing said it would not approve any new coal mines over the next three years and that it would shut more than 1,000 coal mines in 2016, taking out 60 million metric tons of unneeded capacity. A month later, the world’s largest coal consumer announced it would invest $4.6 billion to close another 4,300 coal mines.

    http://www.mining.com/extreme-pollution-forces-china-to-shut-down-hundreds-of-coal-steel-operations/?utm_source=twitterfeed&utm_medium=twitter

    Attached Files
    Back to Top

    China Aug rail coal transport drops, outlook positive


    China's railways posted a year-on-year drop of 3.7% in coal shipment to 155 million tonnes in August, showed the latest data from the National Development and Reform Commission (NDRC).

    Over January-August, China's railways transported a total 1.21 billion tonnes of coal, falling 10.4% year on year.

    Coal-dedicated Daqin line transported 212 million tonnes of coal during the same period, down 22.5% on year, with August volume down 13.6% on year to 29.07 million tonnes, squeezed by the operation of Zhunchi (Zhunger-Shenchi) railway which boosted coal transport of Shuohuang (Shuozhou, Shanxi-Huanghua port, Hebei) railway this year.

    Total cargo shipment by railways, however, edged up 1% from a year ago to 279 million tonnes in August, the first growth since December 2013, showed data from the National Bureau of Statistics.

    Coal delivery by railways is expected to improve, as more shippers may turn to railways due to a stricter truck overloading policy implemented since September 21.

    Under the new policy, the cost to truck coal from coal-rich Shaanxi province to northern ports would increase by 30%-35%, or 40-50 yuan/t, said a local mining source.

    http://www.sxcoal.com/news/info?lang=en&id=4547701

    Attached Files
    Back to Top

    UK coal power falls to record low


    Coal-fired power stations produced the lowest share of UK electricity on record in the second quarter of 2016 following the closures of several plants.

    Coal accounted for just under 6pc of electricity generation in the three months to June, down from more than 20pc in the same period of 2015, the latest Government figures show.

    Gas increased from just under 30pc to more than 45pc in the same period, representing "a large switch in generation from coal to gas, which will have reduced carbon dioxide emissions", according to the latest statistical bulletin.

    The figures highlight the dramatic decline of the fuel that was the dominant source of electricity in the UK as recently as 2013.

    The combination of European environmental rules, the UK carbon tax and the fall in gas prices have together seen coal rapidly fall from the generation mix as some plants close and others are not profitable to run for large parts of the year.

    "Coal fired generation fell by 71pc from 15.9 terawatt-hours (TWh) in 2015 Q2 to 4.6 TWh in 2016 Q2, due to reduced capacity caused by the closure of Ferrybridge C and Longannet and the conversion of a unit at Drax from coal to biomass during the previous year," the Government said.

    The share of coal generation seen in the second quarter was by far the lowest since the records began in 1998, and likely for far longer.

    In May, Britain experienced its first periods of zero coal generation since the era of centralised electricity generation began in the 19th century.

    The share of power from renewable sources in the second quarter of this year actually fell slightly, to just under 25pc - despite more wind, solar and biomass energy being installed - due to lower wind speeds and less rain.

    UK fracking group UKOOG seized on the figures as evidence that "gas is cutting emissions in Britain right now".

    “Coal-fired electricity generation is at a record low level, but this is only possible thanks to gas filling the gap," Ken Cronin, the group's chief executive said.

    The Government has said it plans to end all unabated coal generation in the UK by 2025 and is due to consult on specific plans soon.

    But critics warn the early closure of coal could lead to power shortages if replacements are not built in time.

    http://www.telegraph.co.uk/business/2016/09/29/uk-coal-power-falls-to-record-low/

    Attached Files
    Back to Top

    Mitsui to acquire coal mine interest in Mozambique


    Mitsui & Co. agreed with resource group Vale to purchase stakes in a Mozambique coal mine and associated rail and port facilities for about $770 million, Nikkei Asia reported on September 30.

    Mitsui will acquire a 15% stake in the coal mine and a 35% interest in the rail and port project from the Brazilian company. In December 2014, the Japanese trading house decided to buy into the coal mine and the railway and port infrastructure, planning to pay around $940 million at the time.

    The coal mine investments were initially estimated at approximately $630 million. However, Mitsui will pay only $255 million, reflecting such factors as a 30% drop in the price of coking coal in 2015. Meanwhile, the outlay on the infrastructure portion of the deal rose slightly from $310 million originally as construction delays pushed up costs.

    The mine's high-quality coal for steelmaking will be transported by rail to the Nacala port some 900 kilometers away for export to such countries as Japan. The railway and port will serve as key infrastructure for exports of not only coal but also domestically produced grains, and for imports of various resources.

    The mine's coal output, some 5 million tonnes in 2015, will grow to 18 million tonnes by 2018, which will increase procurement options for Japanese steelmakers relying mostly on Australian coal.

    http://www.sxcoal.com/news/info?id=4547728&lang=en
    Back to Top

    Tangshan cuts 5.39 Mtpa steel capacity, finishing 75% target


    Tangshan, China's top steelmaking city in Hebei province, has cut 5.39 million tonnes per annum (Mtpa) of steel-making capacity so far this year, accounting for 74.6% of the city's de-capacity target for the year, local media reported.

    The city slashed 1.13 Mtpa of steel-making capacity and 0.52 Mtpa of iron-making by demolishing one blast furnace and two converters on September 29.

    The move was in line with the national policy of cutting surplus steel capacity to bring the steel industry back onto the track of heathy and sustainable development.

    Hebei province had pledged in July to cut iron and steel making capacity of 17.26 Mtpa and 14.22 Mtpa respectively by end-2016.

    http://www.sxcoal.com/news/info?id=4547733&lang=en

    Attached Files
    Back to Top
    Commodity Intelligence LLP is Authorised and Regulated by the Financial Conduct Authority

    The material is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material only.

    Officers and employees, including persons involved in the preparation or issuance of this material may from time to time have "long" or "short" positions in the securities of companies mentioned herein. No part of this material may be redistributed without the prior written consent of Commodity Intelligence LLP.

    Company Incorporated in England and Wales, Partnership number OC334951 Registered address: Highfield, Ockham Lane, Cobham KT11 1LW.

    Commodity Intelligence LLP is Authorised and Regulated by the Financial Conduct Authority.

    The material is based on information that we consider reliable, but we do not guarantee that it is accurate or complete, and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material only.

    Officers and employees, including persons involved in the preparation or issuance of this material may from time to time have 'long' or 'short' positions in the securities of companies mentioned herein. No part of this material may be redistributed without the prior written consent of Commodity Intelligence LLP.

    © 2017 - Commodity Intelligence LLP