Mark Latham Commodity Equity Intelligence Service

Tuesday 2nd August 2016
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    China 2016 power consumption may be up 2.5pct on year: CEC

    China's power consumption in 2016 may increase 2.5% from 2015's 5,500 TWh, according to a forecast report released by the China Electricity Council (CEC) on July 29.

    The CEC predicted on February 3 that the consumption in 2016 to increase 1-2% from the previous year.

    China's power consumption rose 2.7% on year to 2,775.9 TWh in the first half of the year, compared with a 1.4% increase in the same period last year, according to data from the National Development and Reform Commission.

    The tertiary industry and residential segment contributed a combines 80.9% to the growth of the total power use over the period, much higher than a 14.4% impact brought by industrial sector, indicating an optimized of power consumption.

    In 2016, power supply in China will continue to be surplus at some areas, the CEC said.

    The utilization of thermal power plants will drop to around 4,050 hours in 2016, said the CEC.
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    Typhoon Nida batters southern China after shutting down Hong Kong

    Large areas of southern China are on emergency alert as a powerful typhoon batters the region.

    Typhoon Nida hit Hong Kong on Tuesday with high winds and torrential rain, forcing schools, businesses and transport services to shut.

    But the storm was reported to be weakening as it moved to the mainland.

    Guangzhou in Guangdong province issued a red alert, its highest weather warning, and people have been advised to stockpile food and essentials.

    The southern cities of Zhuhai and Shanwei are also on red alert, with transport, industry and public services largely grinding to a halt.

    Nida, which earlier passed over the Philippines, is set to be the strongest typhoon in the region since 1983, one official told Chinese state media, warning it could bring severe flooding.

    Hundreds of thousands of passengers have been affected in the region as trains, ferries, planes and busses have been cancelled or delayed.

    In Hong Kong, thousands of workers were evacuated from an offshore oil platform and from a series of tunnels and bridges being built to link the territory with two other cities.

    Hundreds of people took refuge in government shelters in the city, amid torrential rain and gusts of over 150kph (93mph).

    Although Hong Kong officials ended their rainstorm alert at midday on Tuesday, they warned residents there was still a risk of flooding in low-lying areas.

    ISouthern China is hit by heavy rains every monsoon season, but this year has been particularly bad.

    In July, Typhoon Nepartak killed dozens of people in Fujian province and forced hundreds of thousands of Chinese people from their homes. It also caused deaths and damage in Taiwan.
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    PM May resurrects industrial policy as Britain prepares for Brexit

    Prime Minister Theresa May will on Tuesday outline her bid to reshape the British economy for a post-Brexit world, reviving the once unfashionable concept of industrial policy 30 years after Margaret Thatcher killed it off.

    May will chair the first meeting of the "Cabinet Committee on Economy and Industrial Strategy" in her Downing Street Offices, bringing together the heads of 11 other ministries to set out her vision for a state-boosted industrial renaissance.

    "If we are to take advantages of the opportunities presented by Brexit, we need to have our whole economy firing," May said ahead of the meeting in a statement released by her office.

    "We also need a plan to drive growth up and down the country – from rural areas to our great cities."

    After a referendum campaign that revealed dissatisfaction in many of Britain's struggling post-industrial regions, May is pitching a plan to reunite the country by raising the prospects of those who she casts as "hard-working people".

    The June 23 vote to leave the European Union has raised serious questions about the future of the world's fifth largest economy, with some surveys indicating a recession, a hit to consumer confidence and a possible fall in investment.

    "We need a proper industrial strategy that focuses on improving productivity, rewarding hard-working people with higher wages and creating more opportunities for young people so that, whatever their background, they go as far as their talents will take them," May said ahead of the meeting.

    The challenge is to find a formula that arrests a decades-long decline in Britain's manufacturing sector by helping firms tackle the challenges posed by globalization without blunting the market forces that make them competitive.

    She will make a priority of developing the industries already based in Britain - a push that could help carmakers like Jaguar Land Rover (TAMO.NS), GM-owned Vauxhall (GM.N) and Nissan (7201.T), and aerospace industry leaders like BAE Systems (BAES.L) to weather the Brexit storm.

    The strategy will also involve finding new ways to rebalance the economy away from its reliance on the services sector, and ensure wealth is distributed away from the prosperous south east of England.

    Whilst policy detail is scarce, the strategy is likely to combine state-backed investment in traditional infrastructure like roads and rail with funding for modern essentials like broadband and lower energy costs, along with a push to train more of the highly-skilled workers industry says it needs.


    Industrial policy has a toxic legacy in Britain.

    It was once used to help failing national champions through a series of flawed policies in the 1960s and 1970s that sought to arrest a decline in manufacturing influence.

    "We're not getting into the business of picking winners: it's more about creating the right environment," a government source who spoke on condition of anonymity said.

    May's office said the strategy would promote a range of industrial sectors with a focus on addressing long term productivity growth; encouraging innovation and focusing on the industries and technologies that give Britain a competitive advantage.

    May surprised French utility EDF and China last week with a last-minute decision to review the building of Britain's first nuclear plant in decades.

    The refocusing of Britain's economic policy, for the last six years aimed at balancing the books and heavily reliant on foreign money to replace state infrastructure spending, also carries a potentially huge political prize.

    With the opposition Labour Party, long seen as the champions of the working classes, locked in a vicious internal ideological struggle and losing sway in their traditional heartlands, May has an opportunity to won over those who saw voting 'Leave' in the EU referendum a 'nothing to lose' protest vote.

    "The Brexit vote and euroscepticism was strongest in former manufacturing areas, where the industry has gone, the good jobs have gone and people feel disaffected," said David Bailey Professor of Industry at Aston Business School.

    "If May's going to do something about reconnecting, manufacturing has got to be part of the story."

    Attached Files
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    Wiki updates a stock trading signal?

    Project Description

    Behavioral economics already proved that emotions affect individual decision making. This project will be testing whether the measurement of the mood of Wikipedia edits history correlates to the change of stock price.

    The project can be divided into four parts: sentiment analysis of Wikipedia edits history , generating the financial data from NYSE, visualizing the correlation between sentiment analysis and stock price, predicting the future stock price by providing a sentiment analysis value. 10 sample companies will be analyzed in this project. These 10 sample companies are from the top 10 controversial companies list on 2015 CRN report and Entrepreneur. These 10 sample companies are: British Petroleum, Oracle Corporation, VMware, Hewlett-Packard, HSBC, Sony, JetBlue, General Motor, Microsoft and Target. The time span of WikiPedia edits history and financial data is from January 1st, 2014 to July 1st, 2016. The sentiment analysis has three levels: positive, negative and neutral. Each level will be assigned a numerical value: 1 for positive, -1 for negative and 0 for neutral. Hence, the analysis will be focusing on the correlation between average sentiment value of WikiPedia edits history and stock price of given companies.

    If there exists a strong correlation between the measurement of the mood of Wikipedia edits history and the change of stock price, then companies should be able to predict the future stock price change and get benefit from it.

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    Oil and Gas

    Hedge funds turn ultra-bearish on crude and gasoline

    Hedge funds have turned very bearish towards both crude and refined products over the last two months amid signs of an oversupply of gasoline.

    Hedge funds and other money managers added the equivalent of 56 million barrels of extra short positions in the three main Brent and WTI futures and options contracts in the week ending July 26.

    Hedge funds also added an extra 6 million barrels of short positions in the main U.S. gasoline futures and options contract.

    By contrast there were only small changes on the long side of the market, with hedge funds adding 3 million barrels of crude and 0.15 million barrels of gasoline contracts.

    The hedge fund community's increasingly bearish tilt towards crude and gasoline prices continues a pattern evident since the end of May.

    Since May 31, hedge funds have added 197 million barrels of crude short positions and 12 million barrels of gasoline shorts.

    The result is that hedge funds had cut their overall long position in Brent and WTI from 639 million barrels at the end of May to just 400 million barrels by July 26.

    The hedge funds' net long position in crude is the smallest since the end of February when Brent was trading around $33 and WTI at $32 per barrel.

    In gasoline futures and options, hedge fund managers have actually established a net short position of 5 million barrels (

    Hedge fund net short positions in gasoline are exceptionally rare and this is the largest recorded net short since the current data series began in 2006.


    Hedge funds have embarked on the fourth major short-selling cycle in crude oil futures and options since the start of 2015 (

    The number of hedge funds with short positions in the NYMEX WTI contract above the reporting threshold of 350,000 barrels has increased from 40 to 63 since May 31.

    The average short position of those hedge funds has more than doubled from 1.33 million barrels to 2.86 million, according to data from the U.S. Commodity Futures Trading Commission.

    In this latest wave, the short selling of crude has been accompanied by shorting of gasoline futures and options as well.

    The number of hedge funds with short positions in NYMEX gasoline blendstock futures and options over the reporting threshold of 150,000 barrels has increased from 25 to 42.

    The average short position in NYMEX gasoline has fallen slightly from 1.07 million to 0.91 million barrels but not enough to offset the big increase in the number of hedge fund shorts.

    In the current short-selling cycle, crude prices have generally fallen less than during previous cycles, especially the wave of short-selling that started in October 2015 and saw oil prices tumble below $30 at the start of 2016.

    Unlike previous waves of short selling, this one has seen much more diversity of views among hedge funds and other money managers about the outlook.

    Many hedge funds with long positions have held on to them, even as prices have tumbled by around $10 per barrel, around 20 percent.

    Hedge funds still hold 700 million barrels of long positions in Brent and WTI, down from 743 million at the end of May, and a recent peak of 790 million in April, but up from 554 million barrels a year ago.


    The short-term outlook for crude and gasoline prices is now dominated by four cross-cutting influences which will create uncertainty and volatility:

    (1) It will take some time for refiners to clear the build up of gasoline inventories and may require them to process less crude, which will add to the excess of crude in the physical market and intensify downward pressure on oil prices.

    (2) Hedge funds have established large short positions in crude of 300 million barrels, but past experience suggests the maximum short position could be at least 390 million, indicating there is more scope for short-selling to push prices lower.

    (3) More bullish hedge funds have clung on to a large number of long positions, some of which at least could be liquidated if the losses become too great, which would again add to downward pressure on prices.

    (4) But the concentration of hedge fund short positions in crude and gasoline has raised the risk of a short-covering rally and partial price reversal if some fund managers decide the time has come to take profits.

    The ebb and flow of hedge fund positions and oil prices has shown a high degree of cyclicality for the last 18 months ("Hedge funds turn cautious on crude just as Goldman gets less bearish", Reuters, May 16 ).

    The build up of hedge fund long positions between January and May coincided with rising oil prices but eventually presaged the rally's demise ("Risks rise as hedge funds place record bet on oil", Reuters, May 3 ).

    The rapid accumulation of hedge fund short positions since the end of May has accompanied a sharp price drop but could also herald a partial rebound.
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    Oil settles above $40 a barrel (depends when you looked) after falling below threshold in intraday trading

    Futures extended their rout after tumbling 14 percent in July. Saudi Arabia cut prices to Asian customers as the country continues to fight for market share. Drillers in the U.S. boosted the number of rigs seeking oil for for a fifth week, the longest run of gains since last August, according to data from Baker Hughes Inc. U.S. crude and gasoline supplies are at the highest seasonal level in at least two decades.

    “We got here on the back of excessive storage in crude oil and gasoline,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “The storage levels are so out of whack.”

    Oil has tumbled from its recent peak in early June, ending a recovery that saw prices almost double from a 12-year low in February. A settlement at this level would leave crude down more than 20 percent from the recent high, which would characterize a bear market. The persistence of the supply overhang is upsetting industry expectations, with BP Plc, Royal Dutch Shell Plc and Exxon Mobil Corp. reporting second-quarter earnings last week that were worse than estimated.

    West Texas Intermediate for September delivery dropped $1.54 to  settle at $40.06 a barrel  on the New York Mercantile Exchange. Futures touched $39.86, the lowest since April 20. Brent for October settlement fell $1.49 to $42.04 a barrel on the London-based ICE Futures Europe exchange.

    Energy companies accounted for the 10 biggest losers in the Standard & Poor’s 500 Index. Exxon and Chevron Corp., the largest U.S. energy producers, dropped 3.2 percent and 2.9 percent, respectively.

    Global Glut

    State-owned Saudi Arabian Oil Co. said Sunday it will sell cargoes of Arab Light in September at $1.10 a barrel below Asia’s regional benchmark. That is a pricing cut of $1.30 from August, the biggest drop since November, according to data compiled by Bloomberg.

    The U.S. oil drilling rig count climbed by 3 to 374, the highest level since March, Baker Hughes said Friday. The nation’s crude inventories rose to 521.1 million barrels through July 22, keeping supplies more than 100 million barrels above the five-year average, Energy Information Administration data show.

    Demand for crude is set to decline in the next few months. U.S. refineries typically reduce operating rates to perform seasonal maintenance as the summer driving season comes to an end, after the Labor Day holiday in early September.

    “I think the market is going down in anticipation that summer is about to come to an end,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $4.9 billion. “There is a very strong historical trend for gasoline consumption to start to trail off once you get to Labor Day.”

    Libya’s state crude producer is working to resume oil shipments from three ports after a deal was struck to settle payments to local guards. The move may triple production but only after blockades on oil fields that supply the ports are lifted. National Oil Corp. “will now start working” with the unity government to restart exports from the ports of Ras Lanuf, Es Sider and Zueitina, according to an e-mailed NOC statement.

    “We have more than ample supply around the world,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. “We’ve lost half of our spring rally.”
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    Iran Expected To Approve New Oil Contract Models This Week

    It’s expected that Iran will approve a new model for oil contracts on Wednesday that should open the door for foreign investors to help the country reestablish its energy sector.

    Oil Minister Bijan Namdar Zanganeh stated Monday: “We are awaiting government approval due to be out on Wednesday. Our priorities will be jointly owned oil and gas fields, as well as those in which we are after improved oil recovery.”

    He added that the bulk of investor interest has come from Europe. Iran has spent the last two years looking for foreign investors such as Eni and Total SA to develop its resources. Iran hopes those investments will bring in approximately $50 billion per year.

    Before sanctions were ratcheted up in 2012, Iran was producing over 4 million barrels of oil per day. When those sanctions were lifted at the start of 2016, production in the country went from 2.8 million barrels per day to 3.5.

    Also on Monday, Zanganeh stated that the oil market was oversupplied, but added that a balance between supply and demand will be restored. According to a Reuters’ survey, OPEC’s output was expected to reach its highest level in recent history with Iraq continuing to pump more crude oil and Nigeria exporting more even with the flurry of militant attacks. OPEC’s output increased to 33.41 million barrels per day last month.

    As part of the new contracts, Iran is offering better terms to foreign investors, which needs investors to provide $200 billion in foreign cash.

    Zanganeh is confident that the government will approve the new contract models, while Supreme Leader Ayatollah Ali Khamenei said last month that no new contracts would be awarded without necessary reforms.

    The Iran Petroleum Contract, which is the name for the new contracts, has already been postponed serval times, when the rivals of President Hassan Rouhani resisted deals that cou¬ld end the buy-back system. European oil majors have stated that they intend to return to Iran if changes are made to the buy-back contracts used in the 1990s, which either resulted in no profits, or in losses for companies.

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    Libya Oil Exports Seen Limited Until Blockades on Fields Lifted

    Libya’s state crude producer is working to resume oil shipments from three ports after a deal was struck to settle payments to local guards. The move may triple production but only once blockades on oil fields that supply the ports are lifted.

    National Oil Corporation “will now start working” with the unity government of the divided north African country to restart exports from the ports of Ras Lanuf, Es Sider and Zueitina, according to an e-mailed NOC statement. The resumption of exports from the ports and the release of budget money to the NOC would help boost Libya’s oil production by more than 900,000 barrels a day by the end of the year, it said.

    “We need to be clear there are still big military, political and legal obstacles that must be resolved,” NOC Chairman Mustafa Sanalla said in the statement. “In the spirit of national unity, we urge the tribes and the municipalities in the oil-producing areas all over Libya to cooperate and join our commitment to let Libya’s oil flow freely.”

    Libya’s oil production dwindled to 320,000 barrels a day in June from 1.6 million barrels before the 2011 revolt as various armed factions fought for control of the country holding Africa’s biggest oil reserves. Tribes and local factions have shut oil fields including Repsol SA-operated Sharara, Libya’s largest oil field, and ENI SpA’s Elephant, known as El Feel, which have a combined capacity of more than 450,000 barrels a day. Force majeure, a legal clause allowing Libya to stop shipments, was declared for all three ports in 2014 after a series of attacks.

    “There are still numerous hurdles that need to be overcome including the opposition of the tribes controlling the associated fields and the damage to the terminal infrastructure,” Richard Mallinson, an analyst at Energy Aspects Ltd. in London, said by phone. “A separate round of negotiations seems to be required to reopen the fields. Plus, even the NOC statement suggests that force majeure will not be lifted immediately and hence there is no increase in exports just yet.”

    NOC initially criticized the pay deal signed last week, under which Libya’s unity government agreed to settle with Petroleum Facilities Guard members in exchange for them to reopen the oil ports. NOC then backed the agreement after the presidency council confirmed that the only money paid to the PFG is in overdue salaries, the company said in a statement on its website Sunday.

    “This is basically another example of another short term arrangement that will probably not prove to be durable in the long term,” Bill Farren-Price, chief executive officer at consultant Petroleum Policy Intelligence, said by phone. “While we might see some short term uptick in production, if the deal is implemented, the political issues are going to continue to impeded the oil sector.”

    “Libya has now been into years of zero maintenance for the infrastructure so there’s a concern about the infrastructure damage,” said Farren-Price. “There are a few million barrels in the storage in some of the ports, so not very much really. We just don’t see the conditions as being positive and supportive of a long term recovery.”
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    China eyes gas distribution price cut to boost consumption

    China, the world's third-largest natural gas consumer, is planning to lower distribution prices for gas, part of anticipated sector reforms to boost use of the cleaner-burning fuel, state media reported.

    China has since 2015 been formulating reform plans aimed at lifting sagging demand growth for natural gas, as industrial users were paying among the world's highest prices, threatening Beijing's targets of curbing pollution and emissions by using more of the fuel.

    He Yongjian, deputy head of the planning division of the National Energy Administration, told state media at a weekend seminar that policymakers were looking at cutting the regulated distribution costs for the fuel.

    Such a development could weigh on the share performances of city gas firms such as ENN Energy Holdings Ltd and Shenzhen Gas, industry experts said.

    "We are short of natural gas but affordability is also a problem. We will take measures to reform the price mechanism," said He, cited by the China National Radio on Monday.

    Well-head prices and those charged at end users such as petrochemical plants and ceramics makers would be set by the market, while government-supervised distribution prices would be reduced.

    "Prices for distribution and transportation may decline by steps. The distribution costs at branch pipelines are relatively high, and it has pushed up the costs at end users," He was cited as saying.

    The cuts on transportation fees may also apply to trunk lines controlled by state giants, predominantly PetroChina, industry experts have said.

    Under the current mechanism, Beijing sets the ceiling for wholesale gas prices via a link to alternative fuels and also encourages bulk consumers to negotiate prices directly with suppliers such as PetroChina and Sinopec Corp.

    But price adjustments, last made in November 2015, often lagged changes in benchmark fuels, making gas relatively more costly versus competing fuels.

    Demand growth has fallen to low single digits in the past two years from the heady years between 2004 and 2013 when demand jumped five-fold.

    The provincial authorities of Guangdong and Zhejiang have earlier this year rolled out pilot schemes to cut distribution costs, state-owned Economic Information Daily reported in June, paving the way for broader revamps.

    China aims to increase gas consumption to 360 billion cubic meters by 2020, nearly double the 2015 level.

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    Chevron’s Wheatstone LNG project moving forward, first cargo expected in mid-2017

    Construction work on Chevron’s US$29 billion Wheatstone LNG project in Australia is progressing with first cargo still expected in mid-2017.

    “The Wheatstone drilling campaign is now complete, with all nine development well flowbacks successful. Offshore at the Wheatstone Platform hook-up and commissioning is progressing, and the accommodation support vessel has demobilised,” Chevron said in the latest project update.

    Eighty percent of the Wheatstone project’s foundation capacity will be fed with natural gas from the Wheatstone and Iago fields, which are located about 200km north of Onslow off Western Australia’s Pilbara coast. The remaining 20 percent of gas will be supplied from the Julimar and Brunello fields.

    The gas will be supplied to the project’s onshore liquefaction and export plant located 12 kilometers west of Onslow in the Pilbara region. The LNG plant will consist of two LNG trains with a combined capacity of 8.9 million metric tons per annum.

    According to the project update, at the plant site, the export jetty and LNG loading platform are complete, and all LNG Train 1 modules are on site with structural, mechanical and piping works continuing.

    “Delivery of Train 2 modules continues, with 21 of 24 modules now on site. The LNG storage tanks are nearing completion with hydro-testing activities complete.”

    The operations centre facilities are also complete and workforce mobilised. At the laboratory and maintenance workshop, commissioning and handover activities are underway, according  to the update.

    To remind, Chevron has earlier this year pushed back first Wheatstone LNG cargo from the end of this year to mid-2017 due to the late delivery of modules from Malaysia.

    The LNG project is a joint venture between Australian subsidiaries of Chevron (64.14 percent), Kufpec (13.4 percent), Woodside (13 percent), and Kyushu Electric (1.46 percent), together with PE Wheatstone, part owned by Tepco (8 percent).

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    Maurel et Prom chief sells out to Indonesia's Pertamina

    Indonesian state energy firm Pertamina plans to buy a one quarter stake in France's Maurel et Prom from its boss and extend the offer to take over the rest of the Africa-focused oil company in a deal that could value it at close to $1 billion.

    Pertamina said the acquisition of the 24.5 percent stake from Maurel et Prom (M&P) Chairman and Chief Executive Jean-Francois Henin would fit well with plans to bolster its upstream business globally.

    M&P (MAUP.PA), one of many independent oil exploration and production companies suffering from weak oil prices, has been looking for a partner for several years, but may have been able to fetch a much higher price had it agreed to a buyout earlier.

    Back in 2013, Henin confirmed he had been in talks with potential buyers for the whole company.

    On Monday, he told Reuters Pertamina had been among them, but that discussions had foundered on price. Three years ago the company was worth close to four times more than it is now.

    Nevertheless, Henin said he was happy with the deal to sell the company which can trace its roots back to 1831 and the development of shipping lines and trading posts in West Africa.

    "They (Pertamina) can achieve something that corresponds with my dreams for Maurel et Prom because they give the company a means for development," he said.

    Henin holds his stake through a company called Pacifico, which is selling out for 4.20 euros a share, plus a potential 0.50 euro earnout linked to the price of crude oil next year. P&M's shares closed at 2.85 euros on Friday and were suspended from trading on Monday morning.

    The full offer, to be made on the same terms as for Henin's stake, should come later this year, Henin said.

    At that price it would value the whole company at up to 891.9 million euros ($996 mln) based on a total 189,764,042 shares in issue. Its market value was about 541 million euros at the close of business on Friday.

    M&P refocused on oil and gas exploration at the end of the 20th century. Its production operations are in Gabon oil and Tanzanian gas. It also has exploration assets elsewhere including Namibia, Nigeria, Tanzania, Myanmar, Canada, and Italy.
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    Suspected militants attack Shell affiliated pipeline in Nigeria's Delta

    Suspected militants have attacked an oil pipeline operated by a local affiliate of Shell in Nigeria's restive southern Niger Delta region, locals and a community group said on Monday.

    Militants have attacked oil and gas facilities in the OPEC member's energy hub over the last few months, cutting the country's crude production -- which stood at 2.2 million barrels per day (bpd) at the start of the year -- by around 700,000 bpd.

    Nobody has claimed responsibility for a blast at the Trans Ramos Pipeline near Odimodi, operated by Shell's joint venture SPDC, which locals said happened in the early hours of Sunday shortly after 1:00 a.m.. Shell said the line was closed for repairs.

    Endoro New-world, a local, said the blast shook nearby homes and created a "ball of fire".

    "At sunrise, a group from the community in company of the SPDC surveillance team was able to locate the site of the blast," he said.

    Community leader Godspower Gbenekama also said residents heard a loud explosion, adding that there had been an oil spill.

    Shell issued a statement on Monday in which it said it was "investigating the reported incident".

    "The Trans Ramos Pipeline (TRP) transports oil to Forcados Terminal and has been shut since the leak on the Forcados export line on February 14, 2016," it said.
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    China's record gasoline exports signal worsening domestic glut

    China's gasoline exports more than doubled on the year in June to surpass 1 million mt for the first time ever, highlighting growing oversupply due to faltering domestic demand, a trend that is likely to continue in coming months.

    Chinese gasoline exports in June also rose 46% from May to 1.1 million mt, or 312,000 b/d, the latest data from the General Administration of Customs showed.

    Platts China Oil Analytics estimates exports are likely to hit 1.3 million mt in July.

    With the refining sector producing 11 million mt of gasoline in June, it meant that 10% of domestic output was exported, the highest proportion since April 2010, according to S&P Global Platts calculations based on data from the National Bureau of Statistics.

    Gasoline output has been rising steadily as Chinese producers have altered their production slate, moving away from gasoil, demand growth and output of which have fallen on sluggish economic growth.

    Refiners lifted gasoline yields to 28.3% in June, from 26.9% a year earlier, with a year-on-year output growth of 8.9%, Platts calculations show.


    Market participants said domestic gasoline supply was more than just the output from refiners if blended gasoline is also taken into account.

    Imports of mixed aromatics, a gasoline blending feedstock, remained unusually high at 1.17 million mt in June, more than double year on year, but down from 1.21 million mt in May, customs data showed.

    Almost all of China's mixed aromatics imports go into the gasoline blending pool.

    This took the market by surprise as it had initially expected mixed aromatics imports would ease to below 1 million mt in June because of high stocks.

    Mixed aromatics inflows in June -- once fully blended into the gasoline pool -- would add around 3.9 million mt of blended gasoline to the production flow from refineries.

    This indicates that actual supply might be 35% higher than the volume reflected in the NBS data.

    "It's hard to tell how much mixed aromatics has been blended in June, but there is no other way besides going into the gasoline pool as storages are currently full," a Guangzhou-based trader said. Guangzhou is a major destination for imported mixed aromatics.

    A wholesaler from PetroChina's Guangdong sales arm added: "Supplies are plentiful, but demand growth is not catching up with it."

    In addition, heavy rain that started in late June in the central, southwest and southern regions have hit demand for gasoline, leaving more available for export, traders added.


    Market sources say they expect the rise in gasoline exports since February to continue over the next few months because of lower margins on local markets and plentiful domestic supplies.

    "Refiners prefer to sell their barrels on overseas markets even though the FOB Singapore 92 RON gasoline crack has narrowed to an extremely low level," a Beijing-based products trader said. "It is because the margin is much lower on the domestic market than for exports."

    The benchmark FOB Singapore 92 RON gasoline price's premium to front-month ICE Brent futures on July 8 fell to $1.66/b, its lowest in over 32 months.

    The crack was last lower on October 30, 2013, when it stood at $1.45/b. It was at $2.98/b on Wednesday, with the gasoline price assessed at $47.56/b.

    However, the wholesale price before tax of 92 RON gasoline was around $35/b in China's Guangdong province, given that the price, including consumption tax and value-added tax, was around Yuan 4,800/mt on Tuesday.

    A spread of over $11/b was wide enough to cover freight and fees for exports, sources said.

    "The spread encouraged state-owned refiners, especially those lacking retail outlets like Sinochem and CNOOC, to find buyers overseas," the Beijing-based trader said.

    CNOOC's Huizhou refinery has a plan to raise its July oil product exports by 14% to 240,000 mt, from 210,000 mt in June, a Platts survey showed. Meanwhile, Sinochem's Quanzhou refinery also has plans to raise its gasoline exports to around 160,000 mt this month from 130,000 mt in June.


    Over the first half of 2016, China exported 4.45 million mt of gasoline to all destinations, a year-on-year surge of 74.7%. In June, it shipped 29,690 mt to the US.

    In addition, international trading house Trafigura sent a 35,000 mt cargo, comprising of 92 RON, 10 ppm sulfur gasoline, to the US in April from Shandong in China. It was sold by Shandong-based Hongrun Petrochemical.

    The initial destination was scheduled as Singapore during cargo departure but was later changed to the US. As a result, it's not reflected in the customs data.

    Over January-June, Singapore remained the top destination on 52.7% of China's gasoline exports.

    Singapore is the biggest trading hub and blending center in Asia. Most of the cargoes sent there are blended and re-exported.

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    Bashneft sale, a bellwether for Russian oil strategy.

    When Vladimir Putin greenlighted the sale of Russia’s 50% stake in Bashneft in May, it became a test case for how the government may reshape Russia’s oil industry—would it opt for a more consolidated or diversified and competitive Russian oil market?

    Analysts are also taking notes on how the government handles Bashneft’s privatization to see if it offers clues as to how it may deal with Russia’s largest oil company, Rosneft, which is also on the docket for privatization.

    Bashneft, Russia’s sixth largest producer, has been one of the sector’s success stories at a time when ongoing low oil prices and Western sanctions have posed serious threats to producers’ investment programs and output plans.

    Bashneft’s output grew by over 10% in 2015, and the growth rate in the first half of this year was only slightly less. The company achieved this despite being renationalized in late 2014 after its majority-owner Sistema and boss Vladimir Yevtushenkov, were accused of money laundering during the purchase of Bashneft shares.

    The 75% transferred from Sistema at the time is now split, with 50% plus one share owned by the federal government, and a further 25% owned by the regional government of the Republic of Bashkortostan. So far, only the central government has said it intends to sell its stake.

    If the government opts for consolidation, Rosneft may get the nod as the buyer. But several officials have been outspoken recently about Rosneft not taking part, seeing little logic of a privatization where one state-owned company buys another.

    And a sale to the state-owned giant would raise questions of monopolization and weaken the image of Russia as a competitive market, some experts say.

    Rosneft has already submitted its bid for the asset, according to reports by local media, but it is unclear whether Rosneft can win the Kremlin’s support to go ahead with the plan.

    No doubt, Bashneft’s dynamic crude production growth would be a bonus to Rosneft. With an eye to its eventual privatization, the addition of Bashneft’s growing assets would increase Rosneft’s value at a time when Rosneft is struggling to maintain output levels as new projects fail to compensate for declining production at brownfields.

    In terms of Rosneft’s own priorities, the asset acquisition strategy that saw it take control of TNK-BP and Itera in 2013 seems to have slowed.

    If diversification is the way forward, several individuals and smaller companies have emerged with interest in the company.

    Eduard Khudainatov, a former Rosneft CEO, is considered a strong candidate, who may move to acquire a stake in Bashneft via his Independent Petroleum Company.

    There are doubts over how independent Khudainatov’s company is, however, with domestic tax investigators looking at links between Khudainatov and Rosneft, to see if the companies are actually close enough to be called affiliates.

    Officials also said little-known Tatneftegaz, as well as businessmen Alexei and Yuri Khotin, may be interested in acquiring a stake in Bashneft.

    Analysts have questioned whether these smaller players would be able to secure the necessary funding to buy a large stake in Bashneft. If they are, that would lead to greater diversification of the Russian oil market, signaling a change in the state’s approach to recent consolidation of the sector.

    Lukoil may be asking for too much

    The buyer which analysts said represents the most logical choice for Bashneft is Russia’s second largest producer, Lukoil. The two companies already work together on the major Trebs and Titov field, and Lukoil is a key crude supplier to Bashneft’s refineries.

    But there are key issues to be resolved, namely over price and control. Lukoil CEO Vagit Alekperov said that in order to properly govern and optimize spending on such an asset a 100% stake is necessary. He is unlikely to get this, but purchasing the federal government’s full stake would at least give him control of the company.

    As for a price, Alekperov’s number was nearly half of Bashneft CEO Alexander Korsik’s valuation of the company. Korsik estimated Bashneft’s worth at $7.5 billion in June, and Alekperov indicated in mid-June that a fair price for a 100% stake would be around $4 billion.

    Some officials, market experts, and Bashneft’s CEO Alexander Korsik have said selling the company to a pool of investors would be the best option for both the government and the company.
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    Diamond Offshore's weak outlook contrasts demand for onshore rigs

    Diamond Offshore Drilling Inc said there were "next to zero" contracts for deepwater rigs, highlighting the contrast between subdued offshore drilling activity and a recent resurgence in shale drilling.

    The company's shares fell as much as 7.4 percent on Monday as the outlook overshadowed a better-than-expected quarterly profit.

    Oil producers - especially those operating in North American shale fields - are putting rigs back to work as global oil prices recover from 13-year lows hit in January.

    But offshore drilling activity is not expected to pick up anytime soon, given the formidably higher costs of operating fields in deep waters.

    Diamond Offshore, which has scrapped dividend and retired rigs to cope with falling demand, took a $612 million writedown for eight offshore rigs in the second quarter.

    "Some of the larger diversified oilfield service providers have declared a bottom in activity and are suggesting that a recovery is imminent," Chief Executive Marc Edwards said on a conference call. "While this may be the case for certain onshore basins, it is not so for deepwater drilling."

    Schlumberger Ltd, the world's No.1 oilfield services provider, said last month the oil downturn appeared to have bottomed out. Halliburton Co forecast a "modest uptick" in North American rig count in the second half of the year.

    New offshore rigs continue to hit the seas even as older rigs roll off contracts and customer spending falls, creating a "perfect storm" for drillers, Edwards said.

    Separately, Diamond Offshore's rival Transocean Ltd said on Monday it would take full control of its master limited partnership Transocean Partners LLC - a move aimed at reducing costs and improving liquidity.

    The deal, with an enterprise value of about $1.6 billion, will eliminate $29 million in payments to Transocean Partners unitholders and about $10 million in other costs, Tudor, Pickering, Holt & Co analysts wrote in a note.

    Diamond Offshore reported a net loss of $589.9 million, or $4.30 per share, for the quarter ended June 30. A year earlier, it had a profit of $87.4 million, or 64 cents per share.

    Excluding items, the company earned 16 cents per share, well above the average analyst estimate of 3 cents, according to Thomson Reuters I/B/E/S.

    Revenue fell 17.4 percent to $388.7 million, but beat the average estimate of $373.5 million.

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    Beware Junk Energy Bonds Amid Oil Slide, Barclays’s Rogoff Warns

    High-yield energy bonds, which have risen even as oil slid more than 20 percent in the past two months, may be hit if the commodity dips below the $40 it’s trading at now, according to Barclays Plc strategist Brad Rogoff.

    “That portion of the high-yield market especially, it looks a little rich with crude at $40," a barrel, Rogoff, head of global credit strategy research at Barclays Capital, said Monday on Bloomberg TV. "If we drop below, you’ve probably got some downside there."

    High-yield energy bonds are on track for their best returns since 2009, with oil recovering from a 13-year low of $26.21 a barrel in February. After rising to $51.23 in June, crude dipped back under $40 on Monday. With that drop, the correlation between speculative-grade bonds and the oil price is at its weakest level since at least 2010.

    In U.S. investment-grade corporate bonds, Rogoff said investor demand was outstripping companies’ need to borrow. That demand will keep even cash-flush companies like Apple Inc. seizing the opportunity to issue low-cost debt, Rogoff said.

    “The average yield for investment grade right now is 2.75 percent," Rogoff said. "It’s really tough to not want to take advantage of that."
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    Genscape sees small fall in Cushing inventory

    Genscape Cushing inventory for week ended 7/29: -59,335  

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    BP Whiting refinery reformer production cut for repairs -sources

    BP Plc curtailed production over the weekend on the 60,000 barrel-per-day (bpd) reforming unit at the 413,500 bpd Whiting, Indiana, refinery for repairs, sources familiar with plant operations said on Monday.

    A BP spokesman declined on Monday to discuss operations at the Whiting refinery.

    The reformer's cut production levels are having a "minimal impact" on the refinery's overall production, the sources said. The reformer, called Ultraformer 4, has failed to function at expected levels since completing a 10-week overhaul in mid-June. The company hopes to find the problem and repair it.
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    Norway's Statoil sheds Marcellus shale acreage

    For $96 million, and following a weak earnings report, Norwegian energy company Statoil said it was getting rid of some of its gas assets in the United States.

    The Norwegian company holds about 350,000 net acres of the Marcellus shale natural gas basin, but decided to sell off about 11,500 acres of that to Antero Resources Corp.

    "The U.S. business is one of the focus areas in Statoil's international strategy," Torgrim Reitan, a vice president in charge of U.S. production for Statoil, said in a written statement. "We will continue actively to manage the portfolio, optimize field developments, and step up efficiency improvements and cost reduction measures."

    The Marcellus basin is one of the more lucrative reserve areas in the United States. A drilling productivity report from the U.S. Energy Information Administration finds total natural gas production is expected to increase slightly in August as more rigs enter the area.

    Marcellus represents about 18 percent of total U.S. gas production and remains one of the more attractive shale basins in the United States.

    The sale from the Marcellus shale is the third for Statoil in the past two years. In December 2014, the company sold off some of its interest in Marcellus for $394 million after suspending some rig work to save capital.

    Last week, the company said its adjusted operating profit for the second quarter was $913 million, down from the $2.9 billion reported one year ago. Spending plans for 2016 were revised lower by $1 billion to $12 billion.

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    Marcellus Drillers Get Back in the Game; Cautiously Optimisitc

    As you have no doubt noticed, we are in the midst of quarterly reports season.

    Public companies (those with stocks) must file quarterly financial reports with the Securities and Exchange Commission. Along with those filings comes a version of the same news constructed for consumption by investors and the general public.

    The overall “feel” of reports coming from most Marcellus/Utica drillers has been upbeat. The obvious trend is that the big drillers–EQT, Cabot, Southwestern, others–plan to drill more wells in 2Q16 than originally forecast.

    However, given the recent severe downturn, most drillers are sounding notes of caution as a balance to the good news that more drilling is on the way. Perhaps “cautiously optimistic” is the best way to put it…

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    Alternative Energy

    Tesla offers $2.6 billion to buy sister firm SolarCity; both shares drop

    SolarCity Corp agreed to be acquired by sister company Tesla Motors Inc in a deal worth $200 million less than the initial offer, sending shares of both companies down in early trading on Monday.

    Electric vehicle maker Tesla expects to achieve "significant" cost savings and "dramatic improvements" in manufacturing efficiency as a result of the acquisition of solar panel installer SolarCity, Tesla Chief Executive Officer Elon Musk said on Monday.

    Musk said the combined companies will have a "stronger balance sheet," but likely will require a "small equity capital raise" next year. Both companies have been burning through cash and have projected achieving positive cash flow later this year.

    Musk is the largest shareholder in both companies and is chairman of SolarCity. His cousins Lyndon Rive and Peter Rive are co-founders of SolarCity.

    The two companies on Monday announced an agreement to merge, with Tesla holding 93.5 percent of the combined companies and SolarCity 6.5 percent. The deal is expected to win approval in the fourth quarter, the companies said.

    The combined entity would sell solar panels, residential and commercial battery storage systems and electric vehicles under a single brand.

    "Solar and storage are at their best when they're combined," the companies said in a blog post on Tesla's website.

    Musk unveiled an updated "master plan" last month, sketching out a vision of an integrated carbon-free energy enterprise, offering electric vehicles, car sharing and solar energy systems.

    The deal includes a "go-shop" provision that allows SolarCity to solicit offers from other potential buyers for 45 days through Sept. 14.

    Up to Friday's close, SolarCity's stock had risen about 26 percent, valuing the company at $2.62 billion, since Tesla first made an offer on June 21 that was valued at $2.8 billion.

    The companies said on Monday that SolarCity stockholders would receive 0.110 Tesla common shares for every share held.

    The offer values SolarCity at $25.37 per share, based on the five-day volume-weighted average price of Tesla shares as of Friday.

    SolarCity had formed a special committee to review Tesla's initial offer, which was pitched at 0.122 to 0.131 Tesla shares for each SolarCity share.

    Tesla and SolarCity expect to save $150 million in costs in the first full year after the deal closes as the combination would improve manufacturing efficiencies and reduce customer acquisition costs. Musk said he thought the combined companies could "significantly exceed" that mark in the first year.
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    Precious Metals

    Silver miner Fresnillo's H1 core profit jumps nearly 50 pct

    Mexican precious-metals producer Fresnillo PLC reported Tuesday a surge in first-half net profit, buoyed by higher output and increases in gold and silver prices.

    Fresnillo, the world's largest primary silver producer and Mexico's second-largest gold producer, reported net profit of $167 million for the six months ended June 30, 2016, more than double the $76.5 million in the same period a year before.

    Revenue rose 18% on year to $887 million on a 6.1% rise in silver production to 25.2 million ounces and a 23% rise in gold output to 448,000 ounces.

    The FTSE-100 miner issued an interim dividend of $0.086 a share.

    "Precious metals prices have seen a strong recovery since the start of the year, particularly post the U.K. referendum on departing the European Union," the company said. "However, the sustainability of any rally in gold and silver prices will always remain uncertain," it added.

    The miner reaffirmed its plan to produce between 850,000 ounces and 870,000 oz of gold this year, up from its previous guidance of between 775,000 oz and 790,000 oz. It also reaffirmed its silver production guidance of between 49 million oz and 51 million oz, including production from the Silverstream contract.
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    IBM set to launch Blockchain implementation for suppliers.

    IBM Set to Launch One of the Largest Blockchain Implementations to Date

    IBM Global Financing will use blockchain, touted as a way to make many markets and functions more efficient by removing the middleman, to free up capital tied in customer disputes

    The UK government now has its first official blockchain provider for public service

    BVRio to adopt Ethereum blockchain for timber trading records

    Anonymous Blockchain Micropayments Advance With 'Bolt' Proposal

    Failing projects pray blockchain works as 'magic middleware'

    And fail anyway, as will you in 'the year of pointless blockchain projects' says analyst

    redditTwitterFacebook35linkedin 26 Jul 2016 at 07:48, Simon Sharwood

    “This is the year of pointless blockchain projects” and anything you build with blockchain will need to be ripped out and replaced within 18 months, according to Gartner fellow Ray Valdes.

    Speaking to The Register in Sydney today, Valdes said blockchain is among the most secure technologies he's ever seen, having survived seven years at the heart of bitcoin. But he said the technology remain immature and is often misrepresented. Some “implementations” he's seen have nothing to do with blockchain and instead represent “blockchain washing” in which projects involving integration and security are labelled as having something to do with blockchain, just as legacy IT scored “private cloud” labels in the early 2010s.

    Plenty of other projects he's seen can best be described as “blockchain tourism”, as they are small scale proof of concepts that don't touch core systems.

    Others he's seen see teams bogged down in complex integration projects turn to blockchain as an act of “wishful thinking for magic middleware.” Such efforts predictably fail.

    He's also seen blockchain projects conducted in closed environments, which he thinks is futile because the whole point of the technology is to build a network of trust. If you're only going to run blockchain on one machine, he asks why you wouldn't just use a database that is already very good at recording transactions.

    IBM and Microsoft's blockchain-as-a-service efforts confuse him for the same reason. The whole point of the technology is that the network collectively makes transactions trustworthy, yet Microsoft and IBM are offering themselves up as centralised blockchain hubs. In private, Valdes says Microsoft will say its blockchain effort is to help developers understand the technology. Real implementations can wait.

    Valdes says it's futile trying to pick winners in blockchain, because it's at a stage similar to the Web in 1995, a time when the first wave of innovators started to build services and win millions of customers. Just as the likes of Lycos and Magellan were surpassed by Google, and early social networks were swamped by Facebook, Valdes believes the world's dominant blockchain concerns will emerge in a second wave of innovation that takes place years from now.

    But the analyst was at pains to say he is not recommending against experimentation. He's convinced blockchain will be important, but equally sure that anything you do with it now will be a learning experience rather than game-changer for your organisation. ®

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    Gemfields FY ruby production exceeds guidance

    Aim-listed Gemfields’ 75%-owned Montepuez ruby mine, in Mozambique, produced 10.3-million carats of ruby and corundum in the year ended June 30, exceeding guidance of eight-million carats and the 8.4-million carats produced in the prior financial year.

    Gemfields on Monday noted that the volume of higher-quality rubies recovered in the year under review had increased 68%.

    During the financial year, Gemfields had held two rough ruby and corundum auctions, which generated revenue of $73.1-million.

    Meanwhile, Gemfields’ 75%-owned Kagem emerald mine, in Zambia, had produced 30-million carats of emerald and beryl in the year ended June 30, in line with the 30.1-million carats produced the year before.

    Four rough emerald and beryl auctions were held during the year under review, generating revenues of $101.3-million.

    “Demand for our products and the way in which they are presented continue to rise, achievable prices are on the increase and costs are well contained while the level of work and output has increased significantly.

    “This is an exceptional achievement in itself, but is even more impressive when considered against a backdrop of market uncertainty in a number of jurisdictions and Gemfields' ever expanding operating footprint,” CEO Ian Harebottlecommented.
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    Base Metals

    Iluka confirms £215m offer for Sierra Rutile

    Australian mineral sands miner Iluka Resources on Monday reached an agreement with Aim-listed Sierra Rutile to acquire all of its issued and to-be issued shares for £215-million.

    The acquisition will be implemented by merging Sierra Rutilewith Iluka Investments (Iluka Newco), a wholly-ownedincorporated subsidiary of Iluka International.

    Through the deal, Sierra Rutile shareholders will receive 36p for each share. The miner, which has assets in Sierra Leone, traded at 35p a share on the London market on Monday morning.

    “The acquisition will provide the company with additional, long-life resources of proven quality, with further potential through resource additions, reserve optimisation andexploration. The combination enhances Iluka's rutile portfolio position and sits alongside our existing position as the largest global zircon producer,” Iluka MD David Robbsaid in a statement.

    Sierra Rutile CEO John Sisay added that the buy-in demonstrated that Sierra Leone was open for business and able to attract investment from high-profile multinational companies, such as Iluka, that was keen to participate in the development and growth of the country.
    Sierra Rutile is ramping up a new mine, Gangama, in Sierra Leone, which is expected to achieve steady-state production in the third quarter of this year. The new mine will help increase production to between 120 000 t and 135 000 t this year.

    Iluka is a major producer of zircon and the largest producer of the high-grade titanium dioxide products of rutile and synthetic rutile, with operations in Australia and the US.
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    Steel, Iron Ore and Coal

    Coal India July output at 37 MT

    State-owned CIL today said it produced 36.74 million tonnes of coal in July. 

    The company's target for the month of July was 40.29 million tonnes (MT) of fossil fuel, Coal India (CIL) said in a BSE filing. 

    The company produced 162.38 MT of coal in the first four months on the ongoing fiscal. However, the target in April-July period of FY17 was 172.72 million tonnes of coal. 

    The government has set a production target of 598 million tonnes for CIL for the ongoing fiscal. The company is eyeing to double its production to one billion tonnes by 2020.

    Read more at:
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    China said to create two state steel giants

    China is considering a sweeping overhaul of its steel industry that would consolidate major steel producers into two giants, with one located in the north and the other in the south, according to people familiar with the plan.

    Shanghai Baosteel Group Corp and Wuhan Iron & Steel Group Corp will be merged into Southern China Steel Group, while Shougang Group and Hebei Iron & Steel Group will combine into Northern China Steel Group, said the people, who declined to be identified because the information is confidential. The combinations will give Chinese steel mills the scale to rival global giants such as ArcelorMittal SA.

    The State-owned Assets Supervision and Administration didn't respond to a request for comment, while a Baosteel Group spokesman declined to comment when reached by Bloomberg.

    The mergers would enhance government efforts to reduce capacity in the world's biggest producer as part of its drive to overhaul an inefficient sector and bolster an economy growing at its slowest in decades. China's crude steel-producing capacity reached a record of 1.2 billion tons at the end of 2015, according to the China Iron & Steel Association.

    The plan "will help accelerate eliminating excess steel capacities as the companies will remove duplicated products," Helen Lau, an analyst at Argonaut Securities Asia Ltd, said from Hong Kong.
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    Merafe expects to benefit from brighter demand prospects for ferrochrome

    JSE-listed Merafe Resources expects to benefit from renewed positive ferrochrome demand trends, as well as from the fact that only four of seven South African ferrochrome producers are currently in production.

    Reporting on its results for the six months ended June 30, the company, which generates income primarily from theGlencore–Merafe Chrome Venture, on Monday said global stainless steel production is likely to grow by 2.6% this year and by 3.1% in 2017, indicating higher demand prospects for ferrochrome.

    The company reported a marginal increase in production to 196 000 t of ferrochrome in the first half of this year, compared with the 105 000 t produced in the first half of 2015.

    Sales increased by 14% to 218 000 t in the period under review, compared with the 191 000 t sold in the first half of 2015. Revenue increased by 9% year-on-year to R2.41-billion, owing to the higher sales and a 29% weaker average rand/dollar exchange rate, which was partially offset by a 23% decrease in net cost, insurance and freight (CIF) ferrochrome prices.

    Chrome ore revenue as a percentage of total revenue remained flat at 11% in the first half of this year. Average export CIF chrome ore prices also fell 23% year-on-year in the first half of this year.

    Merafe’s profit fell to R57.3-million in the first half of this year, compared with the R124.3-million profit posted in the first half of last year, while headline earnings a share decreased to 2.3c in the six months under review, compared with 5c in the prior comparable period.

    Cash from operating activities, however, increased to R372-million in the six months to June 30, compared with R249-milllion in the prior comparable period.

    As at June 30, Merafe had a cash balance of R412.2-million. It had total debt owing to Absa and Standard Bank of R479.5-million as at June 30, down R80-million from December 31, 2015.

    A further R70-million of debt had since been repaid, taking the debt balance to R409.5-million.
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