Mark Latham Commodity Equity Intelligence Service

Tuesday 15th November 2016
Background Stories on www.commodityintelligence.com

News and Views:

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    Macro

    After frantic rally, China commodities fall hard as speculators panic


    Commodities from coal to soybeans slumped in China on Tuesday as speculators cashed out of futures markets because of concerns that regulators may tighten curbs to tame price swings.

    A selloff in steel and steelmaking raw materials iron ore and coking coal spread to base metals and agricultural products with coke tumbling nearly 9 percent and steel and iron ore each sliding 6 percent.

    Chinese investors renewed their push into commodity futures this month and increased their bets shortly after Republican Donald Trump's shocking U.S. presidential win on Nov. 8 amid a sell-off in global markets. However, that shock proved fleeting and global risk assets surged.

    Tuesday's sharp, broad fall in Chinese commodities "suggests that the crazy jump last week cannot be sustained and so we're seeing self correction," said Wang Di, analyst at CRU consultancy.

    Iron ore on the Dalian Commodity Exchange, which rose as high as its exchange-set ceiling in the previous four trading sessions, fell 6 percent to close at its downside limit of 591 yuan ($86) a tonne.

    Rebar steel and coking coal also each slid 6 percent while coke, made from coking coal, dropped 8.6 percent.

    A flurry of measures from Chinese commodity exchanges from Dalian to Zhengzhou and Shanghai over the past week including increased transaction fees and margins has fuelled a "panic among investors," said analyst Wang Fei at Huaan Futures.

    "With a cap on trading limit, big institutional investors started the sell-off, which was followed by smaller retail investors," said Wang.

    The latest curbs reduced market liquidity, accelerating the price falls, said a Shanghai-based analyst who declined to be named because he was not authorised to speak with media.

    "Hot money from the stock market and programmed trading entered the futures market at the height of the rally. These investors are not familiar with China's futures market. They are the major force in the selloff today and on Friday," he said.

    Chinese commodity exchanges and regulators took similar steps earlier this year to stamp out speculative trading that was also behind the boom and bust cycle in its stock markets last year.

    Going forward, prices of coal and iron ore could remain elevated amid tight Chinese coal supply that has increased appetite for high-grade iron ore, said Wang at CRU.

    Chinese copper futures were not spared from Tuesday's sell-off either, falling 4.3 percent. Tin was down 3.3 percent and aluminium dropped 3 percent.

    In agricultural markets, soybeans slid 4.4 percent, cotton fell 3.6 percent and rapeseed meal slipped 3 percent.

    http://uk.reuters.com/article/china-commodities-idUKL4N1DG30Y
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    Instead of Gold going up.. the bond market has cratered.

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    Why a Coming Gap in the Supply of Oil Is Unlikely


    Amy Myers Jaffe (@AmyJaffeenergy) is executive director of energy and sustainability at the University of California, Davis, Graduate School of Management. She was formerly the director of the Energy Forum at the James A. Baker III Institute for Public Policy at Rice University.

    The oil industry and analysts alike have made a hullabaloo about how capital investment in new oil and gas fields has fallen sharply since oil prices collapsed in 2014. The latest theory about it, reminiscent of scarcity mongering during the run up in oil prices in the 2000s, is that the spending decline is so large it will create a dangerous gap in oil supply sometime between 2018 and 2020. The so-called supply hole thesis was bandied about widely at a recent gathering of senior oil and gas executives in London where the Saudi oil ministercredited concerns about the gap to the kingdom’s willingness to cut its own oil supply now “to signal” other producers to pour more money into exploration and spending budgets now to ensure sufficient oil will be available in the 2020s.  In Houston, belief in the 2018 supply hole is so strong, it is driving cash-starved shale-oil and gas firms to struggle to hang on and not offer their assets into the distressed debt market in the hopes that oil prices will turn back up before they have to close their doors.

    The question is: Is the oil exploration/production (E&P) spending supply hole real or chimera? Data on the inefficiency of capital spending in the 2000s might suggest the latter is more likely. Many of the megaprojects into which the majors dumped so many billions of dollars of capital have not fully panned out, or they have faced major delays for first oil. The new “lean years” environment that is forcing the biggest oil companies to make sure every dollar of spending counts might be more productive, not less productive than the recent past when marginal projects, such as Shell’s $4 billion-plus of wasted capital in Alaska, were greenlighted, only to be axed as outlooks changed.

    Citigroup research in its recent report “A Bumpy Road Ahead for Energy Markets” noted that recent cuts in oil and gas investment have been mostly in line with falling costs for exploration and production activities. The report notes that upward of 15 million barrels a day (b/d)of oil supply growth from non-OPEC countries –  that is, countries other than those with membership in the  Organization of the Petroleum Exporting Countries – will come from new or expansion projects in conventional fields, deep-water developments and to a lesser extent, heavy oil and oil sands projects already receiving the go-ahead to produce new oil between now and 2022.  Russia has been a particular standout, with its recent production reaching 11.2 million b/d, up from 10.7 million b/d a year ago. Russia is typically cited as a place where natural geological decline rates require massive spending to reverse.

    The current low oil-price environment is prompting the oil industry’s largest firms to focus more intently on extending existing fields closer to home in the U.S., and Canada and developing new finds in West Africa rather than taking on riskier, high-cost frontier mega-projects in far-flung places like the Arctic. That is likely to mean that investment dollars will stretch farther and lead to first oil production in shorter time horizons. There will be fewer chances for wasted capital than when the industry poured billions into the Russian Arctic, the Caspian Sea, Iran, Venezuela and Canadian oil sands, only to write down billions in abandoned efforts. Executives say money pouring into the Texas Permian Basin, for example, now favored by the oil patch, could eventually lead to large increases there, with some even predicting that a modest recovery in oil prices could allow the region to reach 5 million b/d, up over 3 million b/d from current output. Sources say its full potential is upwards of 10 million b/d.

    No doubt continuing political troubles in places like Venezuela and Nigeria could continue to shave oil supply from those places and an escalation in such problems could bring about new shortfalls. But so far, other fellow OPEC members like Saudi Arabia and Iran have shown a willingness to grab such markets as they become apparent. If OPEC stays the course on this competition for markets, and the private oil sector spends more wisely as is now promised, the 2018 to 2020 supply hole may be hard to find.

    http://blogs.wsj.com/experts/2016/11/13/why-a-coming-gap-in-the-supply-of-oil-is-unlikely/

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    Trump Foreign Policy.

    US cannot afford to be world's police; let NATO allies pay

    The 28 countries of NATO, many of them aren't paying their fair share. We're defending them, and they should at least be paying us what they're supposed to be paying by treaty and contract. NATO could be obsolete, because they do not focus on terror. We pay approximately 73 percent of the cost of NATO. It's a lot of money to protect other people. I'm all for NATO. They have to focus on terror also.

    Hillary will tell you to go to her website and read all about how to defeat ISIS, which she could have defeated by never having it get going in the first place. It's getting tougher to defeat them, because they're in more and more places, more and more states, more and more nations.

    I want to help all of our allies, but we are losing billions and billions of dollars. We cannot be the policemen of the world. We cannot protect countries all over the world where they're not paying us what we need.

    Source: First 2016 Presidential Debate at Hofstra University , Sep 26, 2016

    Brexit vote means people want to see borders

    Q: Your views on "Brexit," the British exit vote from the European Union?

    DONALD TRUMP: People want to see borders. They don't necessarily want people pouring into their country that they don't know who they are and where they come from. People want to take their country back. They want to have independence, in a sense. And you see it all over Europe. You're going to have, I think, many other cases where they want to take their borders back, they want to take their monetary [system] back, they want to take a lot of things back. They want to be able to have a country again. So I think you're going to have this happen more and more. And I think it's happening in the United States.

    Q: Do you think he's right that there's a parallel?

    SEN. TIM KAINE: There's a couple things you've got to understand. Young voters, those under 50, especially millennials, overwhelmingly voted to stay. And it was older voters who voted to leave [because pf] immigration issues and European regulation.

    Source: Meet the Press 2016 interviews of presidential hopefuls , Jun 26, 2016

    U.S. has become dumping ground for everybody else's problems

    While the Trump and Sanders campaigns both represent insurgencies against party elites, they represent insurgencies aimed at taking America in radically different directions. One way of understanding those different directions is through American exceptionalism. Sanders voters want to make America more like the rest of the world. Trump voters want to keep America a nation apart.

    American exceptionalism today generally denotes Americans' peculiar faith in God, flag, and free market--the Sanders campaign represents an assault on all three [while Trump supports all three].

    Trump's entire campaign is built around the idea that foreign influences are infecting the United States. "The U.S.," he declared upon announcing his presidential campaign, "has become a dumping ground for everybody else's problems."

    Trump's supporters like the fact that he's rich, blunt, and hasn't spent his life in politics. But his pledges to keep the rest of the world at bay are core to his appeal.

    Source: The Atlantic magazine, "War Over American Exceptionalism" , Feb 11, 2016

    Ignore career diplomats who insist on nuance

    The career diplomats who got us into many foreign policy messes say I have no experience in foreign policy. They think that successful diplomacy requires years of experience and an understanding of all the nuances that have been carefully considered before reaching a conclusion. Only then do these pin-striped bureaucrats CONSIDER taking action.

    Look at the state of the world right now. It's a terrible mess, and that's putting it kindly. There has never been a more dangerous time. The so-called insiders within the Washington ruling class are the people who got us into trouble. So why should we continue to pay attention to them?

    Here's what I know--what we are doing now isn't working. And years ago, when I was just starting out in business, I figured out a pretty simple approach that has always worked well for me: "When you're digging yourself deeper and deeper into a hole, stop digging."

    Source: Crippled America, by Donald Trump, p. 31-2 , Nov 3, 2015

    Reimbursement for US military bases in rich countries abroad

    As for nations that host US. military bases, Trump said he would charge those governments for the American presence. "I'm going to renegotiate some of our military costs because we protect South Korea. We protect Germany. We protect some of the wealthies countries in the world, Saudi Arabia. We protect everybody and we don't get reimbursement. We lose on everything, so we're going to negotiate and renegotiate trade deals, military deals, many other deals that's going to get the cost down for running our country very significantly."

    Trump then got into a specific example: Saudi Arabia, one of the more important US allies in the Middle East. Saudis "make a billion dollars a day. We protect them. So we need help. We are losing a tremendous amount of money on a yearly basis and we owe $19 trillion," he said.

    Walking back trade deals and agreements that allow the US military to operate overseas is easier said than done. But Trump has tapped into a powerful anti-Washington populist sentiment.

    Source: Foreign Policy Magazine on 2016 presidential hopefuls , Sep 28, 2015

    Offered himself as Cold War nuclear-arms-treaty negotiator

    [In the 1980s], flying from place to place in his Trump helicopter and Trump jet, he offered opinions on everything from politics to sex, and continually declared himself to be superior in every way. He frequently referred to the many people who thought he should run for president and sometimes acted as if he were a real candidate.

    During one especially tense Cold War moment, he even offered himself to the world as a nuclear-arms-treaty negotiator. His reasoning? A man who can make high-end real estate deals should be able to bring the United States and the Soviet Union into agreement.

    Source: Never Enough, by Michael D`Antonio, p. 10 , Sep 22, 2015

    Support NATO, but it's not us against Russia

    Q: You wrote, "Pulling back from Europe would save this country millions of dollars annually. The cost of stationing NATO troops in Europe is enormous. And these are clearly funds that can be put to better use." Would you want to end the NATO alliance completely?

    TRUMP: I'm a little concerned about NATO from this standpoint. Take Ukraine. We're leading Ukraine. Where's Germany? Where are the countries of Europe leading? I don't mind helping them. Why isn't Germany leading this charge? Why is the United States? I mean, we're like the policemen of the world. And why are we leading the charge in Ukraine?

    Q: So you wouldn't allow Ukraine into NATO?

    TRUMP: I would not care that much. Whether it goes in or doesn't go in, I wouldn't care. Look, I would support NATO.

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    ExxonMobil Chemical to increase Beaumont, Texas, PE capacity by 65%


    ExxonMobil Chemical said Monday it will increase polyethylene capacity at its Beaumont, Texas, petrochemical complex by 65%, with new resin production expected to come online in 2019.

    Construction has already begun. Once complete, the project is expected to add 650,000 mt/year of new polyethylene to the Beaumont complex, which currently has capacity of 1 million mt/year, the company said in a statement.

    "The availability of vast new supplies of US shale gas and associated liquids for feedstock and energy is a significant advantage that enables expansion to meet strong global demand growth in polyethylene," Cindy Shulman, vice president of ExxonMobil's plastics and resins business, said in Monday's statement.

    It was unclear Monday which grades of polyethylene would be included in the expansion.

    ExxonMobil Chemical could not immediately be reached for comment.

    ExxonMobil produces high density, low density and linear low density polyethylene at the complex.

    The Beaumont project is the latest planned by ExxonMobil in the US Gulf Coast region as it looks to take advantage of cheaper natural gas liquid feedstock, and is similar to polyethylene lines being constructed at its Mont Belvieu Plastics Plant in Texas, the company said.

    Combined, the projects are expected to add about 2 million mt of new capacity to increase ExxonMobil's US polyethylene production by about 40% and make Texas the company's largest polyethylene supply point.

    Last month, ExxonMobil said it is continuing to evaluate building a 1.8 million mt/year ethylene-capacity steam cracker on the US Gulf Coast with Saudi Arabia's Sabic, but had not reached a final investment decision.

    Sites in Texas and Louisiana are under consideration. The project would also include polyethylene capacity.

    If the companies decide to move forward, the new complex would be unlikely prior to 2023, per market feedback.

    The first wave of new polyethylene capacity in the US and Canada is expected to begin coming online in the first quarter, per market sources, as production in Mexico has ramped up throughout 2016.

    Platts Analytics forecasts new North American capacity to increase by almost 6 million mt through 2019, with that total increasing to more than 8 million mt through the end of its current forecast period in 2026.

    http://www.platts.com/latest-news/petrochemicals/houston/exxonmobil-chemical-to-increase-beaumont-texas-27710076

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    Oil and Gas

    Europe sends oil as far as Cuba and Australia as glut grows


    The Mediterranean is rapidly becoming the world's most oversupplied oil market, as exports from OPEC heavyweights Iraq and Iran, rising star Kazakhstan and the return of Libyan crude force traders to get creative in marketing their barrels.

    Supply of virtually every key grade of crude in the region has increased in the last year, in spite of the benchmark oil price struggling to hold above $45 a barrel and showing a year-on-year loss of over 10 percent.

    Low freight rates and fierce competition for buyers have unleashed unusual trade flows of Mediterranean crude and prompted some producers to get creative with blending to expand their client base.

    Looking at combined exports of major grades from OPEC members Iran, Algeria and Libya, together with those from non-OPEC producers Russia and Kazakhstan, shipments of crude towards the Mediterranean have grown by some 2 million barrels per day (bpd) over the past year, according to Reuters calculations.

    "The Med is becoming one of the world's most oversupplied markets and volumes will have to move out of the region," one veteran Med crude trader said.

    Exports of CPC Blend, a light, sweet crude, rose to 1.0 million bpd in October, compared with an average of 600,000 bpd in recent years, largely driven by the first shipments from Kazakhstan's Kashagan field.

    As Kashagan is ramping up output, CPC will be shipping around 1.4 million bpd in the next few years.

    It is not the first time that the Mediterranean market has become oversupplied. Excess barrels have occasionally travelled outside the region to Asia and North America.

    Industry sources, however, say cargoes are now travelling much further.

    Reuters data shows a vessel with Algerian Saharan crude sailing as far as Australia and Cuba, while trader Glencore booked a cargo of Libyan crude for the 20,000-km (12,500-mile) trip to Hawaii and Sweden bought Kurdish oil for the first time.

    CPC is up against the return of Iranian and Libyan barrels, which had been frozen out of the market by international sanctions in the case of the former, and civil unrest and violence in the case of the latter.

    Iran returned as a global exporter in January this year, increasing its exports of oil and ultra-light condensate to near five-year highs of 2.56 million bpd in October, from 1.07 million bpd in the same month of 2015.

    Iraq ramped up exports to 3.89 million bpd in October from around 2.7 million bpd a year earlier, although most of its shipments abroad tend to head to Asia.

    URALS IS THE NEW BLACK

    Libyan output has virtually doubled to just shy of 600,000 bpd in the last two months and most of that total is exported.

    Russia, OPEC's largest rival, has increased overall crude output to post-Soviet highs above 11 million bpd and a growing chunk of this has flooded into the Med all the way from the Baltic thanks to cheap freight rates.

    Reuters data shows shipments of Russian crude from the Black Sea port of Novorossisk to the Mediterranean have remained largely steady in the year to date, compared with last year, while those from the Baltic have risen by 12 percent.

    With its diversified pipeline infrastructure, Russia can send crude to the Mediterranean, the Baltic, China and the Pacific. Landlocked Kazakhstan has only one major option for rising supplies - the CPC pipeline to the Mediterranean - unless it expands an existing pipeline to China.

    Traders say they anticipate that more refiners will try to blend CPC with other grades - such as Iraq's heavier Basrah crude - for Asian customers as one potential way of draining the glut.

    But that strategy is not easy to implement given the amount of mercaptan - a harmless, pungent gas - in CPC.

    "You have certain refineries in Italy ... which forbid refining CPC due to the proximity of the beaches and its awful smell," one veteran trader said.

    Also boosting Med exporters is a narrowing of the premium of Brent oil over Dubai crude DUB-EFS-1M, which acts as a benchmark for Asian-based buyers, to its smallest in a year at around $2.05 a barrel. That move gives Brent-linked crudes such as Urals or Saharan an edge in Asia.

    http://www.reuters.com/article/oil-mediterranean-glut-idUSL8N1DF6SF

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    Norway's energy minister doubts 2016 natural gas exports will match last year


    Norway may not match last year's record natural gas exports of 115 Bcm in 2016, the country's energy minister said Thursday, but Oslo is confident of its projections of average annual exports of 100 Bcm over the next 20 years.

    In a wide-ranging interview with S&P Global Platts in London, Tord Lien said Norwegian gas exports would remain high in the future through careful exploitation of the vast resources on the Norwegian Continental Shelf.

    "I'm not sure if this year we'll be able to beat last year, but it'll be in that range," Lien said, when asked if supplies would be higher than 2015's record 115 Bcm.

    "You can't have records every year," he said.

    Given the system's downtime each year for planned maintenance, there would always be a variable impact on overall annual flows, he added.

    But, Lien said, given the current technical capacity of the Norwegian gas system of some 130 Bcm/year, "when you are exporting 115 Bcm, that means everything is running smoothly."

    Some analysts have questioned Norway's ability to maintain its gas exports at such high levels, especially given the slowdown in investment in new exploration since the oil price crash of 2014-2015.

    In addition, no new major gas discoveries have been made for many years on the NCS.

    Lien, though, said he was not concerned.

    "We have a very good understanding on the next 20 years where we expect to export on average 100 Bcm/year," he said. "That is less than today, but it's still

    high. It's going to still be more than 20% of the EU's gas consumption."


    EU SIGNAL


    Key to future developments on the NCS is the knowledge that there will be a market in Europe for Norwegian gas, Lien said.

    Oslo, he said, was buoyed by the strategy announcement in February by the European Commission that Europe would rely heavily on gas for the coming two decades and beyond in its energy supply mix.

    "That was a strong signal from the Commission, and I will like it even more when it really materializes," Lien said, pointing to the UK's move to phase out coal in power generation over the next decade as an example of concrete action.

    "That is really the kind of signal we need, and if Germany were to proceed with their idea of doing the same, that would be of great importance for future investment decisions, which -- let's face it -- are necessary to be able to export 100 Bcm/year," he said.

    Lien said the 100 Bcm forecast was based on both already discovered resources and those that are yet to be found, including in the relatively remote Norwegian high north and Barents Sea.

    Asked whether he was confident of a major gas find in these new frontier areas, Lien was cautious.

    "If you had asked me that question two years ago, I would've said yes," he said.

    "Some of the companies tend to think there is oil there, not gas, so it looks less likely now than two years ago. But we have to do the drilling," he said, adding that both state-controlled Statoil and Lundin Petroleum planned exploration wells in the spring of 2017.

    Lien was also confident on Norway's ability to build new pipeline infrastructure in the remote Arctic waters if a big gas find was made, linking in with existing infrastructure, provided it was economically sound and sustainable.

    "We have already built a gas pipeline into the Arctic with the Aasta Hansteen field [the Polarled line]," he said, adding that an alternative would always be a new LNG plant or an expansion of the existing Snohvit LNG facility.


    TROLL PHASE 3, 'VALUE OVER VOLUME'


    Lien also said that the third development phase of the giant Statoil-operated Troll field would inevitably go ahead as Norway looked to maintain its gas export levels.

    The development would see gas recovered from the Troll Vest structure, which mostly contains oil.

    "It will happen in time, but there is no urgency to do it this year or next year," Lien said. "But it is one of the huge investments that will come on the NCS in the years ahead, obviously. You have to have a plan -- otherwise you lose income either from oil or from gas. So it has to be planned carefully.

    "But that has been the story of the Troll field development," he said. "There has been a huge political debate on this issue, and what we have done so far has worked out very nicely for the Norwegian economy in terms of value creation from in-place resources."

    Asked whether the government backed Statoil's current "value over volume" strategy, whereby some gas production is held back during periods of low prices, Lien said it was up to companies how they manage their resources.

    And that includes majority state-owned Statoil.

    "This has to be one of the real beauties of how we have organized government ownership in Norway -- the fact that there is arms-length distance when it comes to these kinds of decisions," he said.

    Nonetheless, the government is keen to make sure that all operators on the NCS, including Statoil, push forward when it comes to time-critical development projects.

    "You can't have any nonsense from the companies," he said. "There are some obligations that come with being a player of the NCS, and one of them is that you will make decisions that don't waste resources. When it comes to those decisions, Statoil is under the same pressure and expectation from the Norwegian government as everybody else is."

    For new field developments, some delay was not a bad thing, Lien added.

    "It's a good strategy to work hard on getting costs down, and if that means postponing the investment decision by one year, that's a good strategy," he said.

    http://www.platts.com/latest-news/natural-gas/london/interview-norways-energy-minister-doubts-2016-26593531
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    Shell ‘to sell Norwegian assets’


    Supermajor Shell is reportedly considering putting up for sale assets from its $3 billion Norwegian portfolio in the latest divestment programme move following the merger with BG Group.

    The Anglo-Dutch player launched a programme to reduce its debt after the BG takeover, and announced it is targeting the sale of around $30 billion worth of assets over the next three years from its combined portfolio as it plans to exit around 10 countries.

    The operator has previously said it is seeking to sell a large package of its North Sea assets, from both the UK and Norwegian North Sea.

    Shell has now lined up investment bank Rothschild to conduct a review of its Norwegian unit, the Sunday Times reported.

    According to report, the group is considering selling of part or all of its Norwegian business, which operates several large fields in the Norwegian North Sea and holds smaller stakes in others fields.

    Shell declined to comment on the reports.

    Last month, Shell said it had put 16 assets on the market with each asset worth an average of $500 million - making a total of some $8 billion, however, no details on the projects were given at the time.

    Shell’s chief financial officer Simon Henry said earlier this month that the group’s UK North Sea portfolio is seeing “improvements”, and that “performance is beginning to look considerably better”.

    Henry did not rule out selling assets in this region, saying that, while it is cash generative, “it is not the most profitable asset in the portfolio”.

    Media reports in recent months have linked chemical giant Ineos, Denmark’s Maersk Oil and private-equity backed Siccar Point with the sales process. However, Siccar Point last week agreed to take the UK subsidiary of Austrian player OMV for up to $1 billion.

    http://www.upstreamonline.com/live/1190851/shell-to-sell-norwegian-assets
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    Hidden in Awful Petrobras Earnings Is a Bit of Really Good News


    Petroleo Brasilerio SA rattled markets last week when it posted a surprise $4.9 billion loss. Buried in the Brazilian oil giant’s 33-page financial statement was a piece of really good news: Its debt levels have tumbled to the lowest in almost three years.

    While there’s still a long way to go, the $16 billion reduction since mid-2014 marks a hard-fought milestone in the company’s plan to claw its way back into investors’ good favor. Petrobras, once the gem of Brazil’s economy, has been battered in recent years by an oil rout, a massive corruption scandal and government policies that forced it to sell fuel at a loss. It’s the world’s most indebted publicly traded oil company with $123 billion in liabilities to pay back.

    “At the moment, the most important thing for Petrobras is the balance sheet,” said Danilo Onorino, a portfolio manager at Dogma Capital SA, which owns Petrobras bonds.

    The surprise loss -- analysts had forecast a profit -- capped a week of extreme volatility triggered by Donald Trump’s unexpected victory in the U.S. presidential race Nov. 8. Investors the world over dumped higher-yielding assets on speculation Trump’s spending plans may push up U.S. inflation and interest rates. In Brazil, five of Friday’s 10 worst-performing Brazilian corporate bonds were issued by Petrobras, according to Bloomberg data.

    Onorino said the meltdown creates a buying opportunity.

    “In my view, they are quite cheap because of the yield and the potential disposals,” he said from Lugano, Switzerland.

    Petrobras has sold or agreed to sell $9.8 billion in assets since 2015 as it tries to win back its coveted investment-grade rating. The deep-water oil producer plans to unload an additional $25 billion in assets through 2018.

    Moody’s Investors Service on Oct. 21 rewarded the company with its first upgrade in five years, raising the rating one level to B2. While that’s still five steps below investment grade, Moody’s said the asset sales and a new fuel-pricing policy are positives.

    If Petrobras succeeds in trimming the fat on its balance sheet, it’ll look more like other state-controlled oil companies, such as Russia’s Gazprom PJSC and Rosneft PJSC, which enjoy lower borrowing costs than Petrobras, Onorino said. Gazprom’s $1.25 billion in notes due in 2037 yield 6.64 percent, compared with 8.47 percent on Petrobras’ $1.5 billion in bonds due in 2040.

    “The difference between Gazprom and Petrobras is Gazprom has a very normal situation with its balance sheet, and Petrobras is getting there,” he said. “I can see Petrobras getting normalized in terms of net debt because of the disposals.”

    http://www.bloomberg.com/news/articles/2016-11-14/hidden-in-awful-petrobras-earnings-is-a-bit-of-really-good-news
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    Australian LNG exports hit record


    The value of Australia’s monthly LNG exports rose to AUS$1.75 billion in October 2016, according to independent energy analyst, EnergyQuest.

    In its ‘Monthly LNG Report’, EnergyQuest notes that the LNG sector’s performance in October surpassed the previous monthly record of AUS$1.72 billion in Australian LNG export values from January 2015.

    The ‘Monthly LNG Report’ monitors the growth in Australian LNG by project, together with developments in major markets, progress by competitors and interactions between Australian LNG projects and domestic gas markets.

    Australian LNG export volumes grew by 6.6% (65 cargoes) in October 2016 to 4.3 million t up from 4 million t (61 cargoes) in September 2016.

    EnergyQuest Chief Executive Officer (CEO), Dr Graeme Bethune, said: “There was a particularly strong performance by LNG projects on the west coast […] Western Australian projects in October shipped 2.4 million t (36 cargoes), up from 2.2 million t (33 cargoes) in September […] Woodside’s Pluto project shipped 7 cargoes in October, up from five cargoes in September […] Gorgon, operated by Chevron, continues to ramp up and shipped one additional cargo […] Darwin LNG, operated by ConocoPhillips, shipped 0.3 million t (5 cargoes), up from 0.2 million t (3 cargoes) the previous month.”

    On Queensland’s east coast, the Gladstone LNG project shipped 1.5 million t (24 cargoes), down slightly from 1.6 million t (25 cargoes) in September.

    Dr Bethune added: “Interestingly, the Santos-operated Gladstone LNG project sent its first cargo to Mexico, a country that imports gas from the United States The shipment was delivered to the Manzanillo LNG facility, on Mexico’s mid-west coast, a project which is a joint venture between Mitsui, KOGAS (a GLNG partner), and Samsung […] This consignment means that all three new Queensland LNG projects – QCLNG, GLNG and APLNG – have now shipped one cargo each to Mexico.

    “Asian buyers like KOGAS are increasingly looking to new gas markets and as Mexico imports gas from the US, it is interesting to see Queensland gas being imported into Mexico.

    “From a broader market perspective, rather than new US LNG supply heading west to Asia, which is a major market concern for Australian and South East Asian LNG players, this cargo was yet further demonstration of the Australian LNG sector being able to ship east to America.”

    EnergyQuest also notes that the LNG spot price in Asia stood at US$7/million Btu in October 2016 – the highest it has been this year.

    https://www.lngindustry.com/liquefaction/14112016/australian-lng-exports-hit-record/
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    Russia's Russneft shareholder to float up to 20 pct of shares in IPO


    Russian tycoon Mikhail Gutseriyev and his family plan to float up to 20 percent of ordinary shares in mid-sized oil company Russneft in an initial public offering (IPO) by the end of 2016, Russneft said on Monday.

    The stake that Gutseriyev and his family plan to sell on the Moscow Exchange accounts for 15 percent of Russneft's overall share capital, which also includes preferred shares, the company said in a statement.

    A pricing range will be announced on Nov. 18, a person close to the company and market sources told Reuters. The actual IPO price will be announced on Nov. 25, one of the sources said.

    Russian lenders VTB, Sberbank CIB as well as brokerage firms Aton and BCS will organise the IPO.

    The Gutseriyev family controls 75 percent of Russneft's share capital, or 67 percent of all ordinary shares, while the rest belongs to commodities trader Glencore.
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    Further tweaks possible as India's marginal oil and gas block bids fall short of expectations


    In a rearguard action, the Indian government is considering further tweaks and changes to the ongoing auction of 67 marginal oil- and gasfields – a week before the extended deadline of November 21.

    While no official information is available on the number of bids or valuations received for these fields, officials, who asked to remain anonymous, have said that these were “far below” government expectations and that work was under way on additional guidelines and changes to the existing ones to woo investors.

    One of the options under consideration is clubbing together some of the 67 marginal oil and gas blocks, wherein more viable blocks could compensate for comparatively less viable ones, an official said.

    However, no information was available about the demands from some prospective investors that the geographical area of each block be increased, which would give investors the option to explore and develop across larger areas than currently on offer.

    It is also possible that the Oil and Natural Gas Ministry will agree to another deadline extension. The initial October 31 deadline has already been shifted to November 21 after bids fell short of government expectations.

    Worried over poor response from domestic and foreign private investors, the government’s last hope is aggressive bidding for the blocks by national exploration and production major, ONGC.

    Interestingly, all the minor oil and gas blocks now up for bidding had initially been allocated to ONGC, but over the years, the company had either surrendered them after finding the blocks unviable or government had seized them owing to delays in development.

    The current auction is the first to be kick-started under the New Exploration and Licensing Policy, under which nine rounds of auction have been completed but the tenth has been nixed to put the Hydrocarbon Exploration and Licensing Policy (Help) in place. Under Help, exploration and production companies will have the freedom to explore and extract any fuel they discover - be it coalbed methane, shale gas, oil or gas - without having to seek fresh approvals for each resource discovered and that too under a compositerevenue sharing agreement.

    The total oil and gas reserves in the blocks up for bidding have been estimated at 625-million barrels of oil or oilequivalent of gas, spread across 1 500 km2.

    http://www.miningweekly.com/article/further-tweaks-possible-as-indias-marginal-oil-and-gas-block-bids-fall-short-of-expectations-2016-11-14

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    Genscape Cushing inventory


    Genscape Cushing inventory week ending 11/11: -18,587 bbl w/w

    @Lee_Saks  1h
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    In Permian land rush, oil companies knock, call and hope for divine intervention


    Last spring, Pastor Jeff Franklin was fretting. He'd committed his congregation to three new international missions and wasn't quite sure where they'd get the money.

    Then an oilman knocked on the door.

    Franklin's church, Kelview Heights Baptist, is on 10 acres in the middle of this West Texas oil capital. Drillers were never interested before. But now acreage around Midland is so precious - and getting so expensive - landmen are dueling to secure leases for mineral rights under parks, restaurants, churches and thousands of Midland's ranch homes.

    "They literally went to every house," said Jim Connell, Kelview's associate pastor. "Who knew we'd get into the oil business?"

    As oil prices have recovered, drillers have flocked back to Midland and the surrounding Permian Basin, one of the most productive oil fields in North America and among the few places where companies can make money with crude hovering between $40 and $50 a barrel. Majors, independents and small private companies are scrambling to secure land and mineral rights in a competition some producers call a "knife fight."

    As a result, land costs have skyrocketed from $2,000 to as much as $60,000 an acre, which one company paid this summer, raising eyebrows even among peers.


    "Oh, yeah, everybody wants the same acreage," Elizabeth Moses, a vice president at Midland-based Diamondback Energy, said after buying 19,000 Permian acres for $560 million. "Landmen are literally knocking on the same doors."

    Franklin wouldn't say how much money Kelview Heights Baptist pocketed. But the competition helped. At one point, negotiations with Midland's Arrington Oil & Gas were slowing down. Franklin sensed the church might get stiffed.

    "Then the Lord led another landman by," he said.

    Arrington cut the deal at the next meeting. Franklin promptly sent the cash to Honduras, for water wells, to Guatemala, for an orphanage and soup kitchen, and to India, for a new wing on a home for widows.


    "It's a miracle," Franklin said.

    Boom. Crash

    The shale revolution came late to the Permian. Operators first perfected horizontal drilling and high-pressure hydraulic fracturing in shale gas fields, like Fort Worth's Barnett and Louisiana's Haynesville, and in newer oil plays, like North Dakota's Bakken and San Antonio's Eagle Ford.

    "Everybody thought the Permian was dead," said Pete Stark, a senior director at research firm IHS Markit.

    Companies eventually tried fracking there, but the rock was more complex - if drillers figured out how to frack in one spot, that didn't mean they'd succeed a few miles away. It took years of trial-and-error to come up with the right horizontal drilling techniques that allowed them to efficiently tap the reservoirs of oil.

    Soon after, drillers began singing the Permian's praises. The basin had dozens of layers of oil-soaked rock, meaning companies could access a lot of oil from one location and dig wells without hardly moving their rigs. Acres of the Permian were still unexplored. And the support that drillers needed - water trucks, service companies and pipelines - were readily available.

    U.S. oil prices were surging then, to well over $100 in 2011, and drillers began pumping at rates unseen in 20 years. But all the success eventually glutted the market; oil prices started tumbling in the summer of 2014, falling to a low of $26 a barrel in February. The U.S. rig count plummeted from 2,000 to just over 400, according to data compiled by oil field services firm Baker Hughes. At least 100,000 workers lost their jobs.

    There was, however, a bright spot: the Permian. As oil prices stayed stubbornly low, producers found few other plays as economical. Companies like Irving-based Pioneer Natural Resources trimmed operations in other fields and focused on the Permian.

    Companies have added about 80 rigs to the basin since May. No other play has grown as much since the bottom of the crash. The closest, Oklahoma's Cana Woodford, is up 16.

    Two years ago, one-quarter of U.S. rigs were in the Permian. Now, more than 40 percent are.

    $60,000 an acre

    The rush for land in the Permian has driven prices to record levels. In 2006, companies spent $2,000 on average per acre of oil land in the Permian, according to IHS Markit. So far this year, they've averaged more than $30,000, almost 10 times higher than prices in the Bakken or Eagle Ford.

    "They're paying absurd amounts of money," said Erik Paulson, 30, a landman who works in Midland.

    In June, Denver's QEP Resources bought 9,400 acres for $60,000 per undeveloped acre, according to analysts at energy research firm WoodMackenzie. In July, Houston-based Silver Run Acquisition bought 38,000 acres for $29,000 an acre. And in August, companies booked four big deals, including Austin-based Parsley Energy's 9,000-acre buy for at least $35,000 an acre.


    The pace slowed in September; it seemed like the big deals had been cut.

    But they returned in October. Dallas-based RSP Permian bought 41,000 acres for $2.4 billion, or as much as $47,000 per undeveloped acre. Then, Denver's SM Energy announced it was buying 35,700 acres from QStar of Houston for $1.6 billion in cash and stock, or at least $42,000 per undeveloped acre.

    The cost is worth it, said Steven Gray, chief executive of RSP Permian.

    "Some of the best wells in the entire basin are out of there," he said

    Ten years ago, substantial Permian deals - those over $10 million each - totaled $1.1 billion, or less than 2 percent of U.S. transactions. This year, oil companies have already spent more than $14 billion, representing more than one-third of all U.S. exploration and production sales.

    Longtime Permian operators now are watching their land sprout in value. Diamondback, a publicly traded company with prime Midland real estate, bought some of its best acreage 10 years ago for about $2,500 an acre. The company now values it at $60,000 an acre or more.

    Discovery Operating of Midland figures some of its leases are worth 30 to 40 times what it paid for them in 1999.

    "There's lots of Wall Street money in the Permian right now," said chief operations officer Jeff Sparks. "They look at it as a good investment. I do, too."

    Sparks isn't selling, and others wished they didn't have to. Eastland Oil, family-owned for 94 years, has tried to cobble together acreage in three different counties around Midland over the past year or so, only to watch big land companies swoop in and offer double the money. Eastland had two choices: Start matching the offers or selling its rights to the competition. It sold.

    "We buy acreage to drill. We don't buy it to turn," said president and owner Robin Donnelly. "So our business model is not functioning right now."

    http://www.houstonchronicle.com/business/energy/article/In-Permian-land-rush-oil-companies-knock-call-10610795.php?t=b754c326fc438d9cbb#pq=cH7RvZ

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    Painted Pony Petroleum expands 2015 capital budget to accelerate production


    Painted Pony Petroleum Ltd. (TSX: PPY) is pleased to announce an expanded 2017 capital budget to accelerate 2017 production. The planned accelerated production, relative to the previously expected 2017 average annual production volumes, is due to a 100 MMcf/d expansion by AltaGas Ltd. of the AltaGas Townsend Facility. Construction is expected to be complete and ready for incremental volumes of natural gas by the end of 2017.

    HIGHLIGHTS:

     - Planned accelerated expansion of the Townsend Facility and associated infrastructure by an incremental 100 MMcf/d in 2017;
     - Estimated capital cost reductions for the Townsend Facility expansion are expected to reduce Painted Pony's capital lease fee per Mcfe on the expansion by more than 30%;
     - Increased expected 2017 year-end exit production volumes to 408 MMcfe/d (68,000 boe/d) with a 2017 capital budget of $319 million;
     - Forecasted to deliver annual average daily production growth of approximately 110% through the drill bit, from forecasted 2016 annual average daily production volumes of 138 MMcfe/d (23,000 boe/d) to forecasted 2017 annual average daily production volumes of 288 MMcfe/d (48,000 boe/d); and
     - Participated in the recent Spectra Energy Transmission ('Spectra') open season for the Zone 3 Expansion on the T-North pipeline and secured an incremental 250 MMcf/d of firm transportation with an expected on-stream date in the fourth quarter of 2018.

    Pat Ward, President and CEO of Painted Pony, commented 'the production acceleration, increase in liquids focus in 2017, and upward revisions to Painted Pony's 5-year plan will result in free cash flow in 2019 and 2020 with production expected to average 680 MMcfe/d (115,000 boe/d) in 2020.'

    2017 CAPITAL BUDGET

    Townsend Facility Expansion

    Painted Pony has approved the construction by AltaGas of a 100 MMcf/d expansion to the Townsend Facility, expected to be completed and on-stream in October 2017. The Corporation previously expected that an expansion to the Townsend Facility would occur in 2018. The impact of this accelerated expansion is an expected 19% increase in fourth quarter 2017 exit production volumes to approximately 408 MMcfe/d (68,000 boe/d) from previous expectations of 342 MMcfe/d (57,000 boe/d). This will increase annual average daily production by 4% to 288 MMcfe/d (48,000 boe/d) from previously expected annual average daily production volumes of 276 MMcfe/d (46,000 boe/d). With the accelerated expansion of the Townsend Facility, Painted Pony now anticipates 2017 forecasted exit production volumes to be approximately 408 MMcfe/d (68,000 boe/d), a 19% increase in fourth quarter 2017 exit production volumes from previous expectations of 342 MMcfe/d (57,000 boe/d) and exit production growth of 70% when compared to 2016 forecasted exit production volumes of 240 MMcfe/d (40,000 boe/d).The capital cost of this expansion is expected to be 30% - 35% less per MMcf/d of processing capacity than the first phase of the Townsend Facility which was commissioned in July of 2016. The reduced cost is anticipated to reduce the total capital lease fee per MMcf/d for the Townsend Facility by approximately 10%.

    Decreased Well Costs

    Due to ongoing efficiencies, including faster drill times and completions, total budgeted well costs, including drilling, completions, and equipping costs, have decreased to $4.55 million per well from the previously budgeted amount of $4.8 million per well. These cost savings positively impacted the 2016 capital program and the 2017 capital budget which Painted Pony now anticipates to be approximately $319 million which includes an expectation of drilling and completing 61 net wells. The 2017 capital budget is a 9% increase in capital spending, when compared to previously expected 2017 capital spending levels.

    Increased Capital Efficiencies

    Painted Pony's ongoing cost efficiencies provided an ability to optimize field operations by accelerating the drilling of 6.0 net wells and the completion of 5.0 net wells in the fourth quarter of 2016 that were previously planned to occur in the first quarter of 2017. As a result, capital spending in 2016 is forecasted to increase by $14 million to $213 million and estimated capital spending in the first quarter of 2017, which includes drilling 22.0 net wells and completing 12.0 net wells, has been reduced from previous estimates by $23 million to $87 million.

    Improved Cash Costs

    Higher production volumes are anticipated to have a positive impact on Painted Pony's 2017 field cash per Mcfe costs which are now budgeted to be approximately $0.85/Mcfe, a reduction of approximately $0.16/Mcfe or 16% compared to 2016 forecast field cash costs of $1.01/Mcfe. Painted Pony will continue to innovate and streamline field operations as production grows to achieve increasing levels of efficiency while delivering lower operating costs.

    Lower field cash costs combined with lower capital expenditures per well will result in the Corporation's leverage ratio improving to a forecasted 2017 year-end net debt to fourth quarter annualized funds flow ratio of 1.3 times, using November 1, 2016 strip commodity prices.

    Increased Firm Transportation

    Painted Pony recently took part in Spectra's open season for the Zone 3 Expansion on the T-North pipeline and secured a long term transportation agreement for 250 MMcf/d. Construction of the Zone 3 Expansion is expected to be complete in December 2018.

    This agreement, combined with previously announced firm transportation contracts, provide Painted Pony with approximately 570 MMcf/d of firm transportation. The Corporation believes this is sufficient egress capacity to support Painted Pony's growth plans through 2019. Long-term firm transportation and natural gas processing agreements with key third-party service providers combine to underpin Painted Pony's multi-year growth plans.

    http://www.oilvoice.com/n/Painted-Pony-Petroleum-expands-2015-capital-budget-to-accelerate-production/5a9e2bb110ef.aspx
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    Chesapeake Sells 882K Acres & 5,600 Conventional Wells in WV, KY


    Chesapeake Energy, which continues to be strapped financially, embarked on a mission to lighten the debt load years ago–first under co-founder Aubrey McClendon, and then more aggressively under his successor, Doug “the ax” Lawler.

    Many pieces of the company have been sold off: the Oilfield Services division, all of its Haynesville Shale assets, all of its Barnett Shale assets…we could go on.

    Chessy loves to do land deals. In December 2014 Chesapeake sold off 413,000 Marcellus acres mostly in West Virginia . 

    Once again Chesapeake is selling off assets in Appalachia. This time they have cut a deal to sell a mammoth 882,000 acres along with 5,600 operating gas wells in West Virginia and Kentucky. However, the land and wells are in the “shallow” Devonian layer. That is, they are conventional (not shale) wells and acreage. Who’s the buyer and how much is Chesapeake receiving?…

    http://marcellusdrilling.com/2016/11/chesapeake-sells-882k-acres-5600-conventional-wells-in-wv-ky/
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    Enerplus Corporation is pleased to announce its results from operations for the third quarter of 2016 and preliminary 2017 outlook.



    HIGHLIGHTS:

     - Third quarter production averaged 92,077 BOE per day, with 42,598 barrels per day of liquids
     - 25% reduction in third quarter operating expenses per BOE compared to the same period in 2015
     - Positive initial results from recent Fort Berthold high density test, with average production tracking above type curve expectations
     - Preliminary 2017 capital budget of $400 million; approximately 70% allocated to North Dakota with the addition of a second drilling rig
     - Projecting 2017 North Dakota production growth of 25% and total Company liquids growth of approximately 15% (on a Q4 2016 to Q4 2017 basis)
     - Increased 2017 crude oil hedge protection to 17,500 barrels per day
     - Canadian waterflood portfolio optimization with the accretive acquisition of approximately 3,800 BOE per day (45% liquids) of high net-back production, with strong secondary recovery growth potential (closing expected November 2016)

    'Enerplus' third quarter results demonstrate our continued success in reducing the company's cost structure and driving margin expansion,' commented Ian C. Dundas, President & CEO. 'Combined with our top quartile capital efficiencies and balance sheet strength, Enerplus is well positioned to reinitiate growth in 2017. Our preliminary 2017 capital budget of $400 million is largely focused on accelerating liquids production which is expected to grow approximately 15% on a Q4 2016 to Q4 2017 basis. Importantly, our capital plans are predicated on profitable and sustainable growth; we expect our capital spending and dividends to be approximately balanced with internally generated cash flow at WTI US$50 per barrel,' concluded Dundas.

    http://www.oilvoice.com/n/Enerplus-announces-third-quarter-2016-results-and-preliminary-2017-outlook/887c381ad01a.aspx
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    Trudeau Clears Path for Canada to Approve Kinder Morgan Pipeline


    Prime Minister Justin Trudeau has set the table for Canada to approve Kinder Morgan Inc.’s Trans Mountain pipeline expansion by announcing environmental measures aimed at placating opposition to the project.

    Trudeau unveiled a national carbon price in October, and over the past few weeks has pumped billions into marine protection and “green” infrastructure, as well as begun an overhaul of the federal energy regulator and granted crown protection to a rainforest that essentially blocks a rival proposal. He regularly says it’s his job to get Canada’s resources to market while balancing the environment and economy.

    The Liberal prime minister has also backed a hydro dam and natural-gas project favored by British Columbia Premier Christy Clark, as any quid-pro-quo support from her for Kinder Morgan would help him claim consensus ahead of the Dec. 19 deadline for a final decision by the Trudeau cabinet. However, opposition from Vancouver’s mayor, indigenous communities and environmentalists will test Trudeau’s resolve to approve the pipeline and defend the decision against a likely court challenge by its detractors.

    “You could interpret all these signs as part of a grand design to make construction of one or two pipelines possible,” said Tom Flanagan, a former adviser to Stephen Harper, Trudeau’s Conservative predecessor. “Let’s hope he has the stomach to see it through if the opposition continues after the announcement of cabinet approval, because I think it will.”

    The election of Donald Trump as U.S. president has also raised hopes that TransCanada Corp.’s Keystone XL pipeline will be revived, giving Canada -- home of the world’s third-largest proven oil reserves -- another option for its growing crude production. While Trudeau supports Keystone, he and his officials regularly stress Canada’s need to get its resources to “tidewater,” suggesting the TransCanada project isn’t enough. Alberta Premier Rachel Notley has echoed that, saying the oil-producing province still wants a pipeline to the ocean regardless of Keystone and will back Trudeau’s carbon pricing plan if he gets “energy infrastructure” built.

    Proposals in Play

    Trudeau believes Canada needs at least one new oil pipeline and is said to consider Kinder Morgan’s expansion -- a 1,150 kilometer (710-mile) route that would roughly triple current capacity -- the favorite of five major proposals. In addition to Keystone, the other projects are TransCanada’s Energy East, currently under regulatory review; Enbridge Inc.’s Line 3, an inland route to the U.S. that Trudeau must approve or reject by Nov. 25; and Northern Gateway, another Enbridge proposal that was approved by Harper only to have its permits rescinded by a court ruling that Trudeau and the company opted not to appeal.

    The prime minister must decide whether to do additional indigenous consultation and reissue Gateway’s permits, but he opposes the pipeline’s current route through the Great Bear Rainforest. The Duke and Duchess of Cambridge added the area to the Queen’s Commonwealth Canopy conservation initiative during a recent visit, effectively bolstering its protection. Trudeau has also proposed an oil-tanker ban along its shipping route and has flatly opposed the project in the past.

    That makes Kinder the only near-term pipeline headed to the ocean, raising expectations Trudeau will approve it after the recent environmental measures. “What they’re doing is trying to soften the ground of resistance,” according to Nathan Cullen, a lawmaker with the opposition New Democratic Party whose district includes part of the Gateway route and the Petroliam Nasional Bhd natural-gas project the government approved in September.

    “A little bit of lipstick on a pig is the most generous I can be right now,” Cullen said in an interview, adding that Trudeau is losing the benefit of the doubt on Canada’s west coast. “He has more than Harper did, but he has less of it than he did a year ago.”

    Electoral Coalition

    The federal decision is the last step that would clear the way for the pipeline to be built -- barring successful legal challenges, as happened with Northern Gateway -- and comes after the National Energy Board regulator granted conditional approval to the project earlier this year. Trudeau faces pressure from environmental advocates to reject energy projects as he seeks to cut emissions.

    Meanwhile, Kinder Morgan Canada’s president, Ian Anderson, recently clarified that he believes fossil-fuel consumption is driving climate change. Trans Mountain cemented support from 41 indigenous communities and expects more endorsements, Anderson said in October. The company will begin construction on the pipeline in 2017 if it’s approved and expects to ship oil by 2019. It declined a request for further comment Friday.

    Trudeau was elected on firm environmental pledges, yet hasn’t detailed how he will meet his Paris climate-conference goals as the country confronts weak economic growth and slumping commodities prices that have hurt Alberta.

    Last week in Vancouver, the prime minister unveiled C$1.5 billion ($1.1 billion) in funding for ocean protection over five years in a move lauded by environmentalists. Critics, however, were quick to say the money doesn’t make the pipeline acceptable.

    Pipeline Detractors

    “The proactive way to prevent massive impact from an oil spill on B.C.’s south coast is to not approve” Trans Mountain, Vancouver Mayor Gregor Robertson said. “I strongly urge the federal government to reject Kinder Morgan’s pipeline proposal.”

    Signing off on the pipeline would be “one in a series of decisions that seem to fly in the face” of the Paris climate plan, according to Josha MacNab, a regional director at the Pembina Institute, an environmental think-tank. “I don’t think he should underestimate the extent to which Kinder Morgan, if approved, will be a flash-point in British Columbia.”

    Trudeau lived in Canada’s westernmost province as a young man and frequently refers to it as his second home. Last week he also announced a C$45 million contribution to an engineering program at Simon Fraser University near Vancouver, saying he was there because “it’s important to stay grounded where your roots are.”

    Canadian lawmakers return to Ottawa Monday after a one-week break, their last before the Kinder Morgan deadline. Trudeau’s cabinet will weigh the project’s political impact, environmental risks and economic benefit in its decision.

    “The government certainly appears to be setting the table for approval,” said Ed Greenspon, president of the Public Policy Forum, an non-partisan think-tank based in Ottawa. “The prime minister has been consistent in saying climate policies and energy development can co-exist, middle class jobs are top of his agenda, and he won’t leave Alberta out in the cold. He’s taken risks before and looks ready to take some flack here.”

    http://www.bloomberg.com/news/articles/2016-11-14/trudeau-clears-path-for-canada-to-approve-kinder-morgan-pipeline

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    Alternative Energy

    Australia: Records fall as wind, hydro match brown coal generation in October


    In October, renewable energy generators supplied 21.7? of all NEM generation, much higher than any previous month in both absolute and relative terms since complete data became available, with record hydro and wind generation.

    Wind and hydro were just 63GWh (0.4% of total generation) less than the share of brown coal.

    Total demand in the NEM was almost precisely unchanged over the year to October 2016, while demand fell slightly in WA.

    Total emissions from electricity generation in the NEM fell by 0.8% in the year to October 2016, taking emissions back to a level last seen in the year to May 2015. Emissions were, however, still 4% higher than in the year to June 2014.

    The fall in emissions was the result of a fall in both black and brown coal generation, as well as a continuing fall in gas generation. These changes were driven by increased supply from both hydro and wind generators.

    The total share of renewable electricity supply in the NEM increased to 14.7%; its highest share since the mid‐1980s, when electricity demand was less than half the current level.

    Total annual wind generation again set new records in both relative and absolute terms. This was the case in all four states with wind generation, as well as in the NEM as a whole, where it supplied 6.4% of total generation.

    Generation and emissions

    Total annual NEM generation was almost exactly unchanged from September to October, in line with total annual demand (Figure 1).

    However, the coal share of total generation fell sharply, as renewable generation increased (Figure 2). The total coal share of generation was 75.3%, the lowest share since the year ending June 2015.

    The falls in coal generation applied to both black and brown coal; in absolute terms, electricity supplied by black coal generators fell by 0.8% to 53.2% of total NEM supply, while electricity supplied by brown coal generators fell by 0.5% to 22.2% of total NEM supply. Gas generation fell again, and, at 9.8%, supplied less than 10% of NEM electricity for the first time in over six years.

    Lower output from all types of fossil fuel generation means lower total emissions. Estimated emissions from NEM generation in the year to October 2016 were lower by 1.3 Mt CO2‐e, equivalent to 0.8%, than one month earlier.

    This was the lowest annual level for well over a year. It is reasonable to say that this change demonstrates how quickly and effectively emissions could be reduced by increasing the share of renewable generation.

    The driver of falling generation by both coal and gas fuelled power stations was increased renewable generation. In the month of October 2016, renewable generators supplied 21.7% of all generation, much higher than any previous month in both absolute and relative terms, and only just less than the share of brown coal.

    For the year ending October in total, renewable generation was 27.3 TWh, equal to 14.7% of NEM generation, a new record for the NEM and the highest level in the NEM states combined since 1982, at which time, of course, it was all hydro.

    Figure 3 shows that renewable generation supplied just 0.4% of total generation less than brown coal generation in October. This was driven by hydro generation, which was up by nearly 7% compared with one month ago, reaching 8.3% of total NEM supply, which is the highest annual level for two years.

    Hydro generation in the month of October was the second highest monthly figure (after July 2012) since Tasmania joined the NEM in 2005.

    This time last year, Tasmania was in the throes of a record dry winter and spring, whereas rainfall has been abundant this year On the mainland, rainfall has also been plentiful, so that output from both the NSW and Victorian sides of the Snowy is up, as is output from the other Victorian hydro generators.

    For wind generation, the year to October was also a record in both absolute and relative terms, in the NEM as a whole and in all four states with wind generation. Across the NEM, annual wind generation increased by 3.6% over the year to October and wind supplied 6.4% of total NEM generation.

    In SA, wind supplied 36% of total electricity consumed (including electricity supplied from Victoria) in the year to October 2016. In the six months since the Northern coal fired power station closed (on 10 May), wind has supplied 42% of total consumption.

    Demand

    In October, total annual demand for electricity was virtually unchanged in the NEM, with a decrease of 0.07% (Figure 4). Changes were very small in all five states, with very small increases in three and very small decreases in two.

    Demand did continue to increase in Queensland, but the increase recorded was the smallest for two years, indicating that the current stage of the electrification of the coal seam gas fields has been largely completed over recent months.

    With the commissioning of the second liquefaction train at the Asia Pacific LNG Plant, two trains are operating at each of the three plants.

    Over the past two years, electricity consumption in Queensland has increased by about 5 TWh, which is consistent with load forecasts for this time made two years ago by both AEMO and Powerlink, the Queensland transmission service provider.

    It is unclear at this time whether a further 3 to 4 TWh of annual consumption, forecast by these organisations to emerge over the next two years, will materialise.

    In WA demand decreased by 0.3%. This was the first monthly decrease in annual demand since July 2015. It remains to be seen whether electricity demand growth in WA is ending, or whether it will resume again after a few months, as it has done on several occasions over recent years.

    http://reneweconomy.com.au/records-fall-wind-hydro-match-brown-coal-generation-october-74751/
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    Shanxi renewable energy power capacity breaks 10 GW


    North China's Shanxi province, known for its rich coal resources, is boosting development of renewable energy to transfer its economy away from heavy reliance on the dirty fuel and clean the air.

    Renewable energy power generation capacity in the province has surged 47.3% on year to 10.15 GW, including wind power and solar power installed capacity at 7.25 GW and 2.91 GW, respectively.

    As of November 10 this year, power output from Shanxi's wind and solar power plants reached 6.1 GWh, accounting for 28.4% of the province's total power consumption, hitting the record high.

    China plans to increase the share of renewables in total energy consumption to 15% by 2020 from 12% in the 12th Five-Year Plan period, according to the National Development and Reform Commission.

    Installed capacity of wind and solar power will amount to 210 GW and 110 GW over the next five years, with annual growth at 9.9% and 21.2%, respectively.

    http://www.sxcoal.com/news/4549208/info/en
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    Precious Metals

    Platinum market may see first surplus in six years in 2017: JM


    The platinum market could return to surplus for the first time in six years in 2017 as lower autocatalyst loadings and weakness in Chinese jewelry buying pull demand lower, refiner Johnson Matthey said in a report on Monday.

    Mine supply is expected to be flat next year, but supply of recycled metal from autocatalysts has the potential to rebound, it said.

    "In most industrial sectors, the demand outlook remains firm, but purchases in the autocatalyst industry are likely to dip slightly as lower-platinum-loaded catalyst systems are introduced in increasing numbers in European vehicles," it said.

    "As demand in the Chinese jewelry sector seems set on a downward trend, market balance will likely depend on the extent of growth in autocatalyst recycling and the level of physical investment. Unless the latter remains at similar levels to those seen in 2016, we could see the platinum market return to a surplus for the first time since 2011."

    The platinum market likely recorded a shortfall of 422,000 ounces this year, JM said. Platinum supply is expected to have grown marginally as lower output in major producer South Africa was counterweighed by gains elsewhere and growth in recycling.

    Autocatalyst demand is forecast to have grown just under 2 percent, driven by gains in Europe as carmakers factored in tighter European emissions legislation. Physical investment in platinum bars in Japan is expected to have remained strong.

    However, the Chinese jewelry market, typically the largest single segment of demand, saw further weakness, putting global jewelry demand on track to fall 9 percent.

    The market for platinum's sister metal palladium is tipped to post a 651,000-ounce deficit this year, as autocatalyst demand rose to a record 7.84 million ounces. Mine supply is set to be flat, while investors are expected to have continued to sell out of palladium.

    However the market will likely see another big shortfall next year even if investors continue to withdraw, JM said, as mine output is constrained while autocatalyst and industrial demand rises.

    "With demand in industrial sectors looking set for a strong year, driven by significant capacity expansions in the Chinese chemicals industry, the palladium market looks likely to record another year of significant deficit in 2017, even if physical investment remains firmly negative," it said.

    http://www.reuters.com/article/us-platinum-jm-idUSKBN1391FL
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    Base Metals

    Rio Tinto 'cautiously optimistic' about copper market in short term


    Rio Tinto is "cautiously optimistic" about the current coppermarket that has spiked in recent weeks, a senior executive at the world's second-largest miner said on Monday.

    However, Rio holds a stronger outlook for the mid- and long-term copper market, he said.

    Copper prices have surged more than 20% this month, led by stronger economic indicators out of the world's biggest consumer China and expectations that the election of Donald Trump as US president would boost metals markets through increased infrastructure spending.

    Three-month copper on the London Metal Exchange briefly hit $6,025.50 a tonne on Friday, its highest level since June 2015, though it pared some of the gains on Monday.

    "Copper prices have rallied due to a combination of different things," Arnaud Soirat, Rio's chief executive for copper and diamonds, told Reuters on the sideline of "Copper 2016" industry conference being held in Kobe, Japan.

    "People thought demand was higher than they had anticipated, with the Chinese economy showing some good signs of healthy demand," he said, adding that expectations for the positive effect from the US presidential election also lent support.

    Trump has said he plans to fix inner cities, rebuild highways and infrastructure, while erecting barriers against cheap imports, leading to higher consumption of industrial raw materials.

    "But we think the market will be volatile in the near-term and we are cautiously optimistic about the market in a short term," Soirat said, without giving more details.

    Still, copper has attractive long-term fundamentals, he said, due to a limited number of new projects, depleting mines and the declining quality of the ore being mined.

    Asked when Rio expects global supply to exceed demand, Soirat said: "It's difficult to predict whether it will be three years, five years or seven years...But the outlook in the mid- to long-term is pretty healthy."

    http://www.miningweekly.com/article/rio-tinto-cautiously-optimistic-about-copper-market-in-short-term-2016-11-14
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    First Quantum faces $1.4bn claim from Zambian firm


    ZCCM Investments Holdings, the state-controlled Zambian company that holds minority stakes in most of the country’s copper mines, plans to claim as much $1.4-billion from First Quantum Minerals after accusing the Vancouver-based company of fraud. The Canadian company’s stock fell.

    The claim includes $228-million in interest on $2.3-billion of loans that ZCCM-IH said First Quantum wrongly borrowed from the Kansanshi copper mine, as well as 20% of the principal amount, or $570-million, according to an internal company presentation, dated November 4, obtained by Bloomberg.

    The company is also seeking $260-million as part of a tax liability the Zambia Revenue Authority said Kansanshi owed it, as well as the cost of the mine borrowing money commercially that ZCCM-IH said could have been avoided.

    ZCCM-IH, in which the Zambian government has a 77% stake, said in papers filed in the Lusaka High Court on Oct. 28 that First Quantum used the money as cheap financing for its other operations. ZCCM-IH also last month filed a notice of arbitration against Kansanshi in London over the same matter. ZCCM-IH owns 20% of Kansanshi. No figure was mentioned in the court filings.

    First Quantum says the claims are “inflammatory, vexatious and untrue,” and that the loans were at fair market rate. First Quantum is in talks with Zambian government representatives to resolve the matter, it said in a November 11 statement. It declined to comment on Monday.

    FQM, as the company is known, is disregarding the rights of minority owners in ZCCM-IH in dealing directly with government, Philippe Bibard, a spokesman for a minority shareholder group based in France, said by phone November 11.

    http://www.miningweekly.com/article/first-quantum-faces-14bn-claim-from-zambian-firm-2016-11-15
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    Codelco slashes China 2017 copper premium to lowest since 2009


    Global No.1 copper miner Codelco has cut its 2017 term premiums to China by more than a quarter, an executive at the Chilean company said on Tuesday, the lowest level for sales into the world's top consumer of the metal since 2009.

    Senior commercial vice president Rodrigo Toroat said on the sidelines of a conference that Codelco had agreed next year's premium for the physical delivery of metal in China at $72 per ton over the London Metal Exchange benchmark <0#CMCU:>.

    That is down from $98 per ton for this year's contracts and the lowest since 2009, according to Reuters data.

    Traders said it was the first time that Codelco's premium in China had been lower than Europe. The company has offered to cut premiums there to $80-85 per ton.

    The cut will likely stir concerns that demand growth in China is slowing even as copper futures prices have soared in the past week on worries about tightening supplies.

    Investors have also piled into copper futures betting that U.S. President-elect Donald Trump will boost infrastructure spending, spurring demand for the metal.

    Codelco's premiums are viewed as a benchmark for global contracts, with other producers likely to follow suit.

    http://www.reuters.com/article/us-china-copper-codelco-idUSKBN13A07F
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    Chinese copper firm buys owner of Hollywood's Voltage, maker of 'The Hurt Locker'


    A Chinese copper-processing company has bought a controlling stake in the Hollywood studio behind Oscar-winning films "The Hurt Locker" and "Dallas Buyers Club", in the latest sign of China's ambitions in global entertainment.

    Based in the city of Wuhu, west of Shanghai, Anhui Xinke New Materials (600255.SS) has no apparent link to entertainment or films. But it announced late on Sunday that it had bought an 80 percent stake in Midnight Investments, the holding company behind the studio, for 2.39 billion yuan ($350.71 million).

    Under President Xi Jinping, China has been broadening its use of so-called soft power, and corporates have led the way with global investments in soccer, skyscrapers as well as movies. Just recently, China's property-to-entertainment conglomerate Dalian Wanda Group bought Dick Clark Productions, the company that runs the Golden Globe awards and Miss America.

    Apart from Wanda - which is seeking to attract Hollywood to its new multibillion-dollar studio in the eastern Chinese city of Qingdao - China's Fosun International and Huayi Brothers Media Corp have also invested heavily in film.

    The latest to join this bandwagon is Anhui Xinke, whose main business is to process copper and make electric wires and cables. Earlier this month, the firm established the Wotaiji International Media Ltd unit to acquire media assets.

    "I think this is a case of Chinese companies that have cash and are looking at overseas investment opportunities, and realizing that staying within their own sector does not offer a lot of room for growth," said Benjamin Cavender, senior analyst at China Market Research Group in Shanghai.

    The global copper market has been mired in a years-long bear run, plunging around 40 percent over the past three years. Prices of the metal have, however, recovered 20 percent so far in 2016 on hopes of U.S. infrastructure spending and firming demand from top consumer China.

    Cavender said companies like Anhui Xinke were likely keen on following the example set by firms such as Wanda with investments in crown jewel brands that will allow them to diversify their revenues and create a global brand.

    But it will not be easy as "film production is very different and requires its own set of management skills that the buying firm likely does not have in-house," he said.

    Midnight owns Voltage Pictures, which has produced more than 150 movies.

    Anhui Xinke was not immediately available to comment, but it said in the statement that the acquisition would enable it to strengthen its position in the domestic and international film business, and would significantly boost its profitability.

    http://www.reuters.com/article/us-xinke-material-film-idUSKBN139027

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    Steel, Iron Ore and Coal

    China may meet overcapacity-cut target in advance


    China is likely to meet this year's targets early for reducing overcapacity in the coal and steel sectors, a Chinese official said Friday.

    Li Pumin, secretary general of the National Development and Reform Commission, told a press conference that the steel industry had completed its annual target of reducing production capacity by 45 million tons by the end of October.

    The coal sector is also likely to meet its annual goal of cutting capacity by 250 million tons in advance, Li said.

    At present, both sectors have made encouraging headway in cutting overcapacity, which helps to improve corporate profitability, optimize structure and balance market supply and demand, he said.

    Facing surging coal prices and short supply in some areas, Li added the country would coordinate coal, electricity and heating supply to stabilize market prices while firmly cutting overcapacity and adjusting the sector's structure.

    Cutting overcapacity is one of the major tasks in the country's supply-side structural reform.

    In May, the Ministry of Finance earmarked a special fund of 100 billion yuan ($14.68 billion) to subsidize local governments and state-owned companies in reducing steel and coal overcapacity.

    http://www.chinamining.org/News/2016-11-14/1479087656d77955.html

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    Rio Tinto debates Guinea payments at London board meeting


    Rio Tinto called a board meeting on Monday to discuss payments of $10.5 million made to a consultant on its project to develop the world's largest untapped iron ore reserves in Guinea, industry sources said.

    Rio said last week it had alerted Australian, UK and U.S. authorities after becoming aware on Aug. 29 of emails from 2011 that referred to payments to a consultant providing advisory services on its Simandou project in Guinea.

    Spokesmen for the mining company said on Monday they could not comment beyond last week's statement because a legal investigation was underway.

    In an internal email sent at the weekend, Rio Tinto CEO Jean-Sebastien Jacques said he was aware many people in the company were "shell-shocked" by the news.

    He said he had launched an investigation the day he found out there was an issue and that now it was in the hands of external authorities it could take "several years".

    "We are committed to making sure we are not in the same situation again. As you know, over the last five years we have done a lot to strengthen our systems and controls," he said in the email, seen by Reuters.

    Jacques took over as CEO at the start of July from Sam Walsh, who has a track record in iron ore. Jacques has earned kudos for his Oyu Tolgoi project in Mongolia which will be the world's biggest copper mine when completed.

    The Simandou project has huge potential, but Jacques has voiced frustration over the difficulty of funding the massive infrastructure required to develop the mine.

    At the end of October, Rio announced it was selling its Simandou stake to its partner Chinalco, which has declined comment on the investigation.

    Rio's share rose on the news it had found a way out of Simandou and the rally has continued despite the uncertainty of a lengthy legal investigation. So far this year, Rio shares have gained nearly 60 percent.

    The company announced the payments and suspended one senior executive on Nov. 9, the day of the U.S. presidential election won by Republican candidate Donald Trump.

    Any negative impact on Rio's shares from the investigation was wiped out by a strong rally in mining stocks, driven by Trump's promises of major infrastructure projects which are likely to boost demand for raw materials.

    Anti-corruption campaigners asked why the payments had not been questioned earlier.

    "The issue is that the rules are tight and should have been picked up at the time," Peter Van Veen, business integrity director at Transparency International, said.

    Frances Hudson, a director at Standard Life, which holds Rio shares, said the investigation could drag and it was not yet clear whether there would be any financial fallout.

    "The risk of punitive action remains but price movements in the meantime will be determined by other factors," she said.

    http://www.reuters.com/article/us-riotinto-guinea-board-meeting-idUSKBN1391ZP
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    Fortescue strikes Chinese financing deal for $556m ore carriers


    Iron-oremajor Fortescue Metals has struck a partnership deal with China Development Bank Financial Leasing Company (CDB Leasing) over the $556-million price tag for eight very large ore carriers (VLOC) currently under construction.

    The finance lease facility will fund 85% of the VLOC costs for a minimum of 12 years, on highly flexible terms, including early repayment and extension options.

    On delivery of each VLOC, 85% of the payments will be drawn down on the finance lease facility.

    The agreement is the largest direct funding arrangement provided by a major Chinese financier for a non-Chinese company in Australia.

    “This is a groundbreaking finance transaction which builds and broadens Fortescue’s highly valued relationship with China through our first direct funding arrangement with a major Chinese leasing company,” said Fortescue CEO Nev Power.

    “We welcome this important partnership with CDB Leasing, which is a significant milestone in our financial strategy, further extending our debt maturity profile while strengthening our capital structure.”

    The VLOCs are currently being constructed in China and first delivery is scheduled for this month, while the balance of the vessels will be delivered through to mid-2018. Designed to complement Fortescue’s port infrastructure, the fleet will improve load rates, efficiencies and reduce operating costs and when fully operational will provide 12% of Fortescue’s shipping requirements.

    The company will control the vessels for the life of the facility, and will take ownership on maturity or after early repayment.

    http://www.miningweekly.com/article/fortescue-strikes-chinese-financing-deal-for-556m-ore-carriers-2016-11-14
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    New Hope shiploader damaged, faces weeks of delay


    Severe weather conditions have damaged the shiploader at coal miner New Hope’s wholly owned coal terminal in Queensland.

    The miner said on Tuesday that the shiploader was inoperable, and that a preliminary assessment had showed that it could take several weeks for the shiploader to be repaired.

    During this time, the terminal would not be capable of loading coal onto ships.

    New Hope added that the financial implications of the event were being assessed, but noted that delays to shipments could result in lower sales for the current financial period.

    http://www.miningweekly.com/article/new-hope-faces-weeks-of-delay-2016-11-15
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    Indian steel industry calls for united fight against surging coking coal prices


    Amid unprecedented rise in the prices of coking coal in the global market, the Indian Metallurgical Coke Manufacturers' Association (IMCOM) urged its steel industry to work together to resist the trend, The Hindu Business Line reported on November 14.

    Coking coal prices have increased three-fold from $95/t to $310/t in the past year, hurting the viability of the steel industry, which includes metallurgical coke to the steel plants in India, said the IMCOM in a statement.

    Currently, China, with annual imports of around 35 million tonnes of coking coal from Australia, controls the global coking coal prices, hence a higher price by 5% would not harm the industry in China.

    But such a move can kill the steel industries in countries such as India. India imports more coking coal – about 45 million tonnes every year – than China.

    The Indian steel industry is unable to entirely pass on the increased price of coking coal to the users, as this would result in inflation and a spiralling effect in the user industries in the country.

    Indian steel industry is in a position to dictate and regulate the price of coking coal from Australia by insisting on contractual rate as was done by Japanese steel mills and refuse buying at index-based pricing, the IMCOM said.

    IMCOM also urged the Union Ministry of Finance to abolish the 2.5% import duty on coking coal in the interest of the merchant metallurgical coke producers as well as the steel industry which is today confronted with soaring coking coal prices.

    http://www.sxcoal.com/news/4549205/info/en
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    China's key steel mills daily output dips 1.1 pc in late October


    In late October many steel mills began maintenance due to increased feedstock prices such as iron ore and coking coal.

    sxcoal.com

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    Steel industry to focus on high quality products


    Foreign companies will be encouraged to participate in the reorganization of Chinese steel companies, under a plan to cut crude steel production released by the Ministry of Industry and Information Technology.

    The development of iron and steel (2016-20) plan, released Monday, states that Chinese steel companies must be further internationalized through equity sharing and holding, to improve product quality and management.

    Chinese steel companies will be encouraged to build production and processing bases in key markets for the Belt and Road Initiative that have good natural resources and market potential, and are also home to high-speed train and power projects.

    Foreign companies are invited to join China to undertake projects in countries along the belt and road.

    Under the plan, the amount of crude steel capacity in China is to be cut by up to 150 million tons, to less than one billion tons by 2020, as demand for the product drops.

    Any project that aims to expand steel production capacity will be banned.

    Xin Guobin, vice minister of the Ministry of Industry and Information Technology, said that the steel industry must adopt intelligent manufacturing to reform itself.

    "We have overcapacity in low-end products while the high quality products are still lacking. The Chinese economy needs more sophisticated steel products for more technology-oriented industrial development," said Xin.

    The domestic consumption of crude steel is expected to be 650-700 million tons by 2020, less than the estimated output of 750-800 million tons.

    The plan also requires energy consumption in the steel industry to be reduced by more than 10 percent while major pollutants must be cut by more than 15 percent.

    The biggest 10 steel companies are predicted to make up about 60 percent of the industry by 2020, up from the current 34 percent.

    The number of steel companies is to be reduced as efforts are concentrated on building high-quality steel bases in Zhenjiang Port (Guangzhou) and Fangchenggang Port (Guangxi Zhuang autonomous region).

    Companies with high ratio of liabilities to assets must prioritize debt reduction.

    http://www.chinamining.org/News/2016-11-15/1479172681d77975.html

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