Mark Latham Commodity Equity Intelligence Service

Wednesday 29th March 2017
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    Trafigura adopts blockchain

    A group of companies including IBM has spearheaded the development of a new blockchain-based crude oil trade finance platform.

    Along with IBM, commodities trading group Trafigura and corporate investment bank Natixis took part in the creation of the platform, built using code from the Linux Foundation-led Hyperledger project. IBM’s BlueMix cloud hosting service is also being utilized.

    Within the system, parties can view transaction data as it is published on the blockchain. The platform also hosts documentation and updates on shipments, deliveries and payments.

    Natixis, a member of the R3 distributed ledger consortium, is no stranger to trade finance applications of blockchain, having joined with the "Digital Trade Chain" project last year.

    According to Arnaud Stevens, Natixis’ head of global energy and commodities in New York, the bank sees the tech as potentially bringing down costs while also boosting procedural transparency.

    Stevens said in a statement:

    "We want to use blockchain to optimize the antiquated arena of commodity trade finance. The current process is paper and labor intensive, we have multiple friction points with high processing costs and limited automation. Distributed ledger technology brings some much-needed innovation into our industry."

    The platform’s introduction marks the latest bridging of the blockchain and trade finance worlds. It’s an application that has attracted significant interest from a range of companies and governments worldwide, including Dubai.

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    Grupo Mexico to buy Florida East Coast Railway $2.1 billion

    Mexican miner Grupo Mexico said on Tuesday it had agreed to acquire Florida East Coast Railway for $2.1 billion, a rare acquisition that comes as U.S. President Donald Trump has been trying to renegotiate trade ties between the two countries.

    Trump has threatened to renegotiate the North American Free Trade Agreement, a treaty that has been a boon to the region's rail freight operators, which seamlessly shuttle car parts, grains and beer back and forth across the region's borders.

    Grupo Mexico's transport unit financed the purchase from Fortress Investment Group with $1.75 billion in debt and $350 million in capital, the company said in a statement to the Mexican stock exchange.

    The announcement confirmed a Reuters report on Monday about the pending acquisition and the company's ambition to manage foreign assets after dominating the railway freight sector in Mexico for years.

    Florida East Coast Railway "is a unique and irreplaceable asset with 565 miles of track that offers rail services along Florida's east coast," the statement said.

    The purchase is subject to government approval.

    Grupo Mexico, one of the world's largest copper producers, together with Kansas City Southern de Mexico and Ferrovalle, control more than 72 percent of the Mexican rail freight market.

    Grupo Mexico and Kansas City Southern de Mexico together have a 75 percent stake in Ferrovalle.
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    Jiangsu Feb power output up 19.93% YoY

    Eastern China's Jiangsu province saw its power output up 19.93% year on year to 36.36 TWh in February, showed data from Jiangsu Provincial Commission of Economy and Information on March 28.

    Utilization of generating units averaged 734 hours in February, 23 hours less than a year ago, according to the commission.

    By end-February, Jiangsu had an installed power generation capacity of 102.69 GWh.

    The province consumed of 40.44 TWh of electricity in February, climbing 20.53% from the preceding year. Of this, 27.46 TWh was consumed by industrial sector during the same period, gaining 29.06% year on year.

    Residential segment consumed 11.26 TWh of electricity over January-February, up 0.25% year on year, data showed.

    The primary industries – mainly the agricultural sector – used 744 GWh over January-February, up 6.69% from the year-ago level.

    During the same period, the secondary industries – mainly the industrial sector -- consumed 58.94 TWh, increasing of 2.74% year on year.

    Power consumption by tertiary industries – mainly the service sector – witnessed a yearly increase of 6.55% to 12.41 TWh in the first two months.

    During the same period, Jiangsu's newly-added power generation capacity was 1.24 GW. Of this, newly-added thermal power capacity stood at 80 MW; that of wind power amounted to 96 MW; and that of hydropower reached 500 MW; solar power at 334.8 MW.
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    Oil and Gas

    Libya's oil output down 252,000 bpd after shutdown at Sharara, Wafa fields - source

    Production at the western Libyan fields of Sharara and Wafa has been blocked by armed factions, reducing output by 252,000 barrels per day (bpd), a source at the National Oil Corporation (NOC) said on Tuesday.

    The shutdown at Sharara, which had been producing about 220,000 bpd, began on Monday, and the shutdown at Wafa a day earlier, the source said.

    Sharara resumed operations in December after a shutdown that began in November 2014 due local protesters blocking a pipeline connecting it to the Zawiya oil terminal.

    Austrian oil firm OMV, one of the foreign partners in the field, is expected to load a 600,000 barrel cargo of Sharara crude from Zawiya on board the Sea Vine tanker later this week.

    The tanker, which arrives at the port early on Wednesday, could still load its cargo from storage tanks, a Libyan port source with knowledge of the shipment told Reuters.

    OMV did not immediately respond to a request for comment.

    The oil field is operated by a joint venture between NOC and a consortium of Repsol, Total, Statoil and OMV.
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    NOC comes out fighting against PC’s oil sector changes

    The National Oil Corporation (NOC) has come out fighting in a battle with the Presidency Council which yesterday stripped the oil ministry of key powers and assumed many of them itself, while also diminishing NOC’s role.

    Tonight NOC chairman Mustafa Sanalla protested that the PC had no authority to make such changes.

    “I have asked the Presidency Council to withdraw its recent resolution,” said Sanalla. “It has exceeded its authority. Only the House of Representatives, the legislature, has the power to make these changes”.

    He went on to insist that NOC’s authority, responsibilities and duties were based on its articles of association from 1970 amended in 1979 which were enshrined in Libyan law.

    Sanalla protested that NOC had long supported the establishment of a genuine government of national accord able to speak for all Libyans.

    But he continued: “Until we have a political settlement, our duty is to administer the country’s oil resources in trust for the benefit of the nation. The proper administration of our oil resources is vital to the future stability of the country.”

    It has not yet been possible to understand why the PC moved against the oil ministry, which has been long regarded as little more a cypher and a useful source of yet more government employment. So little did Serraj think of its role that in the final Government of National Accord cabinet list that he and his PC colleagues produced, no one was named as oil minister.

    The internationally-respected Sanalla has had several run-ins with the PC over money. NOC wants $2.5 billion in large part to fund the repair and restoration of damaged oil and gas infrastructure. It also wants control over its funds. But as with most other state institutions, NOC has to go and ask the Central Bank to settle its bills. This is not a fool-proof process. It recently even failed to have its salaries paid.

    Politically, Sanalla also finds himself between a rock and a hard place. His insistence that NOC is a purely technocratic organisation whose job is to produce and export oil and gas has meant he has found himself operating across the political divide.  When Hafter ousted Ibrahim Jadhran’s Petroleum Facilities Guard from the four Oil Crescent terminals last December, the LNA handed their control back to NOC. This caused mutterings in Tripoli.

    However after the ultimately abortive attempt by the Benghazi Defence Brigades to retake Sidra and Ras Lanuf at the start of this month which, despite PC denials of complicity was clearly backed by the its defence minister Colonel Mahdi Bargathi, the rival eastern NOC was revived to challenge Sanalla’s NOC . Eastern NOC is once again reportedly seeking to sell oil independently of NOC in Tripoli.

    Thus Sanalla and the organisation he heads is viewed with suspicion by Tripoli for managing to operate successfully in the east and with suspicion by the east because the corporation remains in its Tripoli HQ where its technicians, geologists, traders and back office staff and systems are housed.

    It may seem curious that at the very moment that NOC is under pressure from the east, it should also find its position challenged by the PC in the west.
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    Saudi Aramco Valuation Seen Topping $1 Trillion After Tax Cut

    Saudi Aramco could have a market value of more than $1 trillion, Sanford C. Bernstein & Co. estimates, after the government slashed the oil producer’s tax burden to attract investors ahead of what may be the world’s biggest initial public offering.

    The tax cut will increase Aramco’s net income by 300 percent, putting its per-barrel income in a range similar to that of international oil companies including Exxon Mobil Corp., Bernstein analysts said in a report. A production-weighted valuation on a par with such companies could give Aramco, known officially as Saudi Arabian Oil Co., a market value of $1 trillion to $1.5 trillion, the analysts said.

    The Saudi government announced Monday it’s reducing Aramco’s tax rate to 50 percent from 85 percent, as it prepares to offer investors as much as 5 percent of the world’s biggest oil exporter. Estimates of Aramco’s potential valuation vary widely. Deputy Crown Prince Mohammed bin Salman has said it’s worth about $2 trillion, while consultant Wood Mackenzie Ltd. valued the company last month at around $400 billion, according to clients who attended a private briefing.

    “Before the reduction in tax, it was hard to argue that Aramco should trade at an equivalent value to Western oil peers,” Bernstein analysts Neil Beveridge and Oswald Clint said in the report. “With the reduction in tax to 50 percent, profitability per barrel is more in line” with those peers, and could be higher, they said.

    The sale of a 5 percent stake in Aramco at a $1 trillion valuation would raise $50 billion dollars for Saudi Arabia, which is trying to reform and diversify its oil-dependent economy.  China’s e-commerce business Alibaba Group Holding Ltd. has claim to the world’s biggest IPO to date after raising $25 billion in 2014.
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    Spot LNG trading makes up 18% of total LNG volumes in 2016: GIIGNL

    Pure LNG spot trading -- trades where cargoes are delivered within three months of the transaction date -- made up 18% of total imported LNG volumes in 2016, an increase from 15% the year before, industry group GIIGNL said Monday in its latest annual review.

    Spot trade volumes were estimated at around 47 million mt last year, up from 37 million mt in 2015, with the main drivers of the growth being China, India and Egypt, GIIGNL said.

    Combined, the three countries accounted for 30% -- or 15 million mt -- of the pure spot LNG volumes imported in 2016.

    "Signs indicate an evolution towards a greater flexibility in [LNG] trade, and the commercial patterns are evolving as destination-free volumes increase and as new buyers and sellers join the market," GIIGNL said.

    With many longer term LNG supply contracts also due to expire in the coming years, the move toward more spot trading is likely to gather pace, GIIGNL president Jean-Marie Dauger said.

    "In order to respond to market changes and cope with the uncertainty of future supply and demand, LNG contracting strategies have grown in importance," he said in the report.

    "In this respect, most buyers pay particular attention to flexibility -- in terms of destination as well as offtake obligations -- and price competitiveness," he said.

    "In a well-supplied market and given the significant quantities under long-term contracts which are due to expire in the medium-term -- particularly in Japan -- the share of spot and short-term volumes could increase further in the coming years."


    While spot trading increased last year, when short-term transactions are added, the overall market share was only flat year on year.

    Defined by GIIGNL as transactions under contracts of four years or less, the share of spot and short-term transactions remained stable for the second consecutive year, at around 28% of total trade.

    This was despite an expectation that there would be an increase in spot and short-term transactions given the addition of new LNG supplies in 2016 from Australia and from the US with its flexible, destination-free LNG contractual terms.

    However, GIIGNL said, "international LNG flows remained largely intra-regional due to the large quantities having been contracted long-term with fixed destination and to relatively low price differentials between the different basins."

    Qatar was the main source of spot and short-term volumes to global markets followed by Australia, while Nigeria did not supply as much spot and short-term LNG as in 2015 due to a lower overall output, GIIGNL said.

    On the demand side, spot and short-term imports were negatively impacted by the overall reduction of LNG imports into Brazil -- traditionally a large importer of spot LNG volumes -- as well as by a decline in spot and short-term purchases in Japan and South Korea, it said.

    Elsewhere, the startup of a long-term contract in Pakistan came at the expense of the country's demand growth on the spot and short-term market.

    And while China imported 7.4 million mt of additional LNG in 2016, the country increased its spot and short-term imports by only 1.6 million mt because the rest was already covered by long-term commitments.

    On the other hand, the Middle East expanded its spot and short-term imports to 17.4 million mt in 2016 -- almost triple the 6.4 million mt in 2015.

    Egypt experienced the largest increase, absorbing an additional 4.9 million mt, primarily from Qatar and Nigeria.


    In 2016, total global LNG imports rose by 7.5% to 263.3 million mt, a return to the "robust pace" experienced before 2011, Dauger said.

    Most of the supply was absorbed by increased demand in China, India and the Middle East (see table).

    By contrast, demand in mature LNG importing markets such as Japan, South Korea and Europe remained sluggish.

    "Against expectations, Europe did not function as a sink for the production increase in 2016," it said, the UK recorded the largest decline in imports year-on-year of 2.6 million mt or 26%.

    Dauger said the growth in additional supply was not as abundant as expected due to production delays, slower ramp-ups and lower exports from historical suppliers.

    "As a result, the expected 'wave' of LNG has not materialized yet, and some signs of market tightness were observed toward year-end due to colder weather than usual in Europe and northeast Asia," he said.

    Nonetheless, with new LNG production facilities due online in the next few years, especially in Australia and the US, the market is set for a period of oversupply.

    "Looking at future years, with Australian projects ramping up and new trains from the US progressively coming online, the global LNG market could become oversupplied until the mid 2020s," Dauger said.

    But, he said, low LNG prices could see the surplus capacity absorbed by additional imports and/or shut-ins.

    Attached Files
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    Cooper Energy approves Sole development

    The board of ASX-listed Cooper Energy has approved the development of the Sole gas project, offshore Victoria, with the company launching a A$151-million capital raise as part of its financing initiative to fund the project.

    The Sole gas project is expected to require a capital investment of some A$533-million for its upstream development, with some 25 PJ/y to be produced from the Sole gasfield and supplied to users in south-east Australia.

    Gas produced from the field will be piped to the Orbost gasplant, from where it will be supplied to customers through the Easter Gas Pipeline.

    First gas from the project is expected in the March quarter of 2019.

    Cooper Energy MD David Maxwell on Wednesday said the final investment decision, which was subject to securing financing, was a milestone event in the company’s gasstrategy and would trigger a 43-million-barrel-of-oil-equivalent uplift to Cooper Energy’s 2P reserves, which is a near 400% increase to proven and probable reserves.

    Based on the current ownership, the first full year of operation from Sole is expected to lift Cooper Energy’s yearly production to more than six-million barrels of oil equivalent, a significant increase on the one-million barrels of oilequivalent estimated to be produced in the 2017 financialyear.

    Meanwhile, Maxwell noted that the equity raising announced on Wednesday will provide shareholders the opportunity to participate in a transformational event for the company.

    Cooper Energy will place 150-mllion new fully paid ordinary shares in an institutional placement, raising an initial A$47-million. A one-for-two accelerated nonrenounceable entitlement offer will raise a further A$104-million.

    Both the institutional placement and entitlement offer will be priced at 31.5c a share, representing an 18.2% discount to the company’s closing price on March 28.

    Cooper Energy said on Wednesday that the company was confident of securing debt financing for the remaining funding requirement for the Sole gas project during the June quarter of this year.
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    Unipec vies for top global oil trader spot with 10 percent volume growth in 2017: official

    Unipec, a unit of Asia's largest refiner Sinopec, expects its oil and gas turnover volumes to grow by 10 percent for the sixth year in 2017 as it vies for the top trading spot with Vitol, the world's biggest independent oil trader.

    The trading unit's growth will come from expanded storage and logistics capability, including new assets in South Africa, and rising shipments of U.S. crude to Asia, said a Unipec senior official who declined to be named due to company policy.

    "Our trade volume has been growing at 10 percent a year since 2011," the official said. "This year we're also expecting a 10 percent growth as we have increased our storage capacity and enlarged our global logistics capability."

    Unipec's trade volumes for crude, oil products and LNG reached 370 million tonnes (2.7 billion barrels) of oil equivalent in 2016 with revenue of more than $100 billion, the official said.

    The volumes claimed by the Unipec official - most of which are supplied to Sinopec refineries - exceed Vitol's  reported trade turnover in barrels, but the Chinese trading unit's revenues do not appear to beat the Swiss trader's income.

    Vitol said on Friday its crude oil and product trading rose to 2.60 billion barrels last year, or more than 7 million barrels per day (bpd), bringing in $152 billion.

    Sinopec purchased Chevron Corp's South African assets and its subsidiary in Botswana to secure the Chinese state company's first major refinery in Africa.

    The assets include a 100,000 bpd oil refinery in Cape Town, a lubricants plant in Durban as well as 820 petrol stations and other oil storage facilities.

    Unipec has also seen an increase in its U.S. crude shipments to Asia this year, the official said, as shale oil production increases with improved prices and traders export surplus supplies to meet growing demand in the east.

    For LNG, Unipec's trade volumes remained small at just over 2 million tonnes last year, the official said.
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    No more waiver extensions for Tidewater

    Offshore support vessel provider Tidewater is not seeking any further renewal of limited waivers from its lenders and noteholders following the expiry of the latest one.

    After experiencing a significant decline in the utilization of its vessels, average day rates received, and vessel revenue due to lower oil and gas prices, Tidewater has implemented a number of cost reduction measures to mitigate these effects while continuing its efforts to reduce operating costs and preserve liquidity.

    The company has been in talks since last year with its principal lenders and noteholders to amend its various debt arrangements to obtain relief from certain covenants.

    Only in March the company got two extension from lenders and noteholders to sort out its debt arrangements.

    In a statement on Tuesday, Tidewater reported that the latest waiver of covenant default from its lenders and noteholders expired in accordance with its terms on March 27, 2017, without a renewal being sought by the company.

    Jeffrey M. Platt, President and Chief Executive Officer of the company, said, “Negotiations with our lenders and noteholders are progressing well, with a significant number of commercial points negotiated and, to our knowledge, resolved. However, work remains to resolve a small number of issues and to obtain the approval of our board of directors and final approval from the various financial institutions.

    “In the meantime, while we press forward with our lender and noteholder groups in an effort to bring our negotiations to a successful conclusion, it is business as usual for the company.”

    In case new debt terms are not negotiated, Tidewater will have to consider other options, including a possible reorganization under Chapter 11 of the federal bankruptcy laws.
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    Genel slashes reserves estimate for Iraqi Kurdistan field again

    Genel Energy, one of a handful of foreign oil producers in Iraqi Kurdistan, slashed its reserves estimate for Taq Taq, its largest operational field, by about 66 percent and suspended its 2017 gross average production forecast for the field.

    The company said it expected to book an impairment against the carrying value of its holding in the Taq Taq field by $181 million in its 2016 accounts, blaming significant uncertainties around the oil reserves in the field.

    Genel estimated that Taq Taq had gross reserves of 59 million barrels of oil as of Feb. 28, down from the 172 million it had estimated in Dec. 31, 2015.

    "Reduction in reserve estimates for Taq Taq is a consequence of a reassessment of the gross rock volume above the oil water contact and fracture porosity in the undrained cretaceous Shiranish reservoir," Genel said.
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    Schlumberger buys stake in Borr Drilling

    Schlumberger, the world’s largest oilfield services provider has bought a stake in Norway’s Borr Drilling, a recently established offshore drilling company.

    This was revealed by Schlumberger’s CEO Paal Kibsgaard at a conference in New Orleans on Monday.

    He said the company had set up a special venture fund for project investments “to demonstrate our openness to new types of business relationships with our customers.”

    “With our new venture fund we are simply expanding our offering from technical support to now also include financial support, where needed, with the ultimate goal of securing more activity for our 18 product lines.”

    He then revealed that examples of some of the investments “so far” include the Fortuna Project with Ophir and OneLNG , the Tendrara project with Sound Energy, “and most recently our investment in Borr Drilling.”

    Offshore Energy Today has reached out to both Schlumberger and Borr Drilling, seeking more details on the size of the investment.

    Borr Drilling, a newcomer in the offshore drilling industry, raised eyebrows this month when it announced it would buy 15 jack-up drilling rigs from Swiss-based Transocean for $1.35 billion. This mean Transocean is exiting the jack-up rig business.

    After the announcement, Borr Drilling launched a private placement through which it raised some $800 million with the support from new and existing investors. According to Finansavisen, Schlumberger bought some $220 million worth of shares in Borr Drilling.
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    Chevron starts producing LNG from Gorgon’s third train

    Chevron-led Gorgon LNG project on Barrow Island off the northwest coast of Western Australia started LNG production from the plant’s third liquefaction train.

    The production start follows Chevron’s Chief Executive John Watson‘s claims earlier in March that the third train will come online by the end of the month, ahead of schedule after the construction and commissioning had gone smoothly.

    The $54 billion joint venture between the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and JERA (0.417 percent), shipped its first cargo on March 21, 2016.

    In total, the facility has shipped 50 cargoes of liquefied natural gas so far, with production at the second liquefaction train starting in October last year.

    Company’s spokesman told LNG World News that the first and the third train at the facility are currently producing, while the production from the second train is temporarily suspended for a planned maintenance to improve the train’s capacity and reliability.

    Once all three trains ramp up to full capacity, the Gorgon LNG project will be producing 15.6 million tons of liquefied natural gas per year, while the domestic gas plant will be supplying 300 terajoules of gas per day to Western Australia.
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    Oil now in Dakota Access pipeline under Missouri River reservoir

    The Dakota Access pipeline developer said it has placed oil in the pipeline under a Missouri River reservoir in North Dakota and that it’s preparing to put the line into service.

    Dallas-based Energy Transfer Partners made the announcement Monday in a brief court filing with the U.S. District Court for the District of Columbia. The announcement marks a significant development in the long battle over the project that will move North Dakota oil 2000 miles (1930 kilometres) through South Dakota and Iowa to a shipping point in Illinois. The pipeline is three months behind schedule due to large protests and the objections of two American Indian tribes who say it threatens their water supply and cultural sites.

    ETP spokeswoman Vicki Granado said in an email to The Associated Press that the line will deliver oil to Patoka, Illinois, within a few weeks.

    “Oil has been placed in the Dakota Access Pipeline underneath Lake Oahe. Dakota Access is currently commissioning the full pipeline and is preparing to place the pipeline into service,” the court filing stated.

    Despite the announcement, the battle isn’t over. The Standing Rock and Cheyenne River Sioux tribes still have an unresolved lawsuit that seeks to stop the project. The Standing Rock chairman did not immediately return a call seeking comment on ETP’s announcement.

    The tribes argue that a rupture in the section that crosses under Lake Oahe would threaten their water supply and sacred sites and would prevent them from practicing their religion, which requires clean water.

    The company disputes the tribes’ claims and says the $3.8 billion pipeline is safe.

    The tribes in December held up the project by successfully pushing the U.S. government for a full environmental study of the Lake Oahe crossing, which is in southern North Dakota. But the Army Corps of Engineers, which manages the Missouri River for the government, rescinded the study and gave the company permission to complete the pipeline at the urging of President Donald Trump shortly after he took office.

    There were months of protests against the pipeline, mainly in North Dakota, where opponents set up a camp on Corps land between the Standing Rock Reservation and the pipeline route. At times it housed thousands of people, many of whom clashed with police, who made about 750 arrests between August and February. The on-the-ground protests waned after the Corps ordered the shutdown of the camp in February in advance of the spring flooding season.

    While the protests have abated, opposition has not. The company on March 20 reported “recent co-ordinated physical attacks” on the pipeline without offering details. Authorities in South Dakota and Iowa confirmed that someone apparently used a torch to burn a hole through empty sections of the pipeline at aboveground shut-off valve sites.

    North Dakota has become the second-biggest oil producer in the U.S. in the past decade, trailing only Texas. The state stands to gain more than $110 million annually in tax revenue with oil flowing through the pipe, according to an analysis by The Associated Press.
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    $16.7 Billion in Pipeline Projects Awaiting FERC Approval

    No quorum until at least late-May

    After approving seven pipelines in 2017 FERC lost quorum with the resignation of Norman Bay, halting all project approval. Bloomberg Intelligence held an analyst briefing today to discuss the state of pipelines and FERC, with former FERC Commissioner Tony Clark and Baird Senior Research Analyst Ethan Bellamy providing their views on the topic.

    Bay’s resignation, which came in January, left the agency one short of its three-member quorum. Bay announced his resignation within hours of the Trump administration’s naming of Commissioner Cheryl LaFleur as acting chair of the agency.

    The seven pipelines approved this year represent 7 Bcf/d of new capacity. Largest among them is the Rover Pipeline, a $4.2 billion 3.3 Bcf/d line that will transport gas from the Utica to Ohio, West Virginia, Michigan, and Ontario. The second largest pipeline that was approved is the $3 billion 1.7 Bcf/d Atlantic Sunrise. This will take gas from the Marcellus all the way to Alabama.

    However, according to Baird, nearly 12 Bcf/d of pipeline projects with a total cost of $16.7 billion are awaiting FERC approval. FERC increased its power to approve smaller activities without a quorum, but final project approval still requires one. Baird estimates that restoring a quorum will likely take two months, and currently no appointees have been nominated.

    Without quorum issues are piling up

    According to former FERC Commissioner Tony Clark, about one FERC order per day is held up by a lack of quorum. This means that there is a backlog of about 35 orders already, with more arriving each week. Clark expects that even if someone was nominated today, a quorum will not be achieved until late May or early June, if not later. This would mean that there would be perhaps 85 pending issues when FERC becomes able to rule on them. Therefore, it will take a significant amount of time before FERC is able to quickly respond to new applications.

    It does seem likely, however, that the current administration will nominate people that favor development, meaning that it will be more likely to approve projects. Clark expects that one person from Capitol Hill, one person from a state regulatory agency and one person from the private sector will fill the three open seats in FERC. Given the current administration’s propensity to look for outsider input, it is likely that the private sector nominee will be the chairman.
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    British Columbia secures 90% of First Nations agreements needed for LNG-related pipe projects

    The British Columbia government has entered into 64 natural gas pipeline benefits agreements with 29 eligible First Nations, more than 90% of the agreements that need to be negotiated along the routes of four pipelines proposed to carry gas to planned LNG export terminals along the province's western coast.

    The agreements are part of the Canadian province's plan to partner with First Nations on LNG opportunities, the BC Ministry of Aboriginal Relations and Reconciliation said in a statement Thursday.

    The four pipeline projects are: Prince Rupert Gas Transmission Pipeline, Coastal GasLink Pipeline, Westcoast Connector Gas Transmission and the Pacific Trail Pipeline.

    Under the agreements, the First Nations will allow the pipeline to traverse their traditional territories, to which they hold aboriginal rights and title.

    In exchange for entering into agreement with the province, each First Nations group will receive "milestone" payments at certain points along the pipeline process, a ministry spokesman said Friday.

    These include: an initial payment and subsequent payments when the pipeline starts construction and when it goes into production, as well as ongoing benefit payments for the life of the project, a spokesman said.

    To date, 17 of the 19 First Nations along the Prince Rupert Gas Transmission pipeline route have pipeline benefits agreements in place with the province.

    The agreements with 14 First Nations along the pipeline route are public and the other agreements will be made public as they take effect.

    The Prince Rupert Gas Transmission Pipeline Project is a proposed 900-kilometer (560-mile) pipeline to deliver gas from the Hudson's Hope area to the planned Pacific NorthWest LNG facility near Prince Rupert.

    "The pipeline will form a vital link from the gas fields of northeastern BC to the proposed LNG facility should development of the facility proceed," the statement said.

    The province also has reached agreements with 17 of the 20 First Nations along the proposed pipeline route of the Coastal GasLink Pipeline Project, a 670-kilometer (415-mile) gas pipeline from the Dawson Creek area to the proposed LNG Canada facility near Kitimat.

    Fourteen First Nations have public agreements and other agreements will be made public as they take effect.

    In addition, the BC government has reached benefits agreements with 15 of 19 First Nations along the proposed route of the Westcoast Connector Gas Transmission Project, a pipeline of about 850 kilometers (530 miles) that would carry gas from production areas in northeast BC to BG Canada's proposed LNG export facility on Ridley Island, near Prince Rupert.

    All 16 First Nations located along the proposed route of the proposed Pacific Trail Pipeline Project have come together to form the First Nations Limited Partnership.

    The province has an agreement with the FNLP that will provide an estimated $32 million in direct benefits during the construction phases of the project, a proposed 480-kilometer pipeline to deliver gas from Summit Lake, BC, to the Kitimat LNG facility site at Bish Cove on the northwest coast.
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    US propylene to see sharp drops in April-May: sources

    Propylene pricing in North America could see steep drops in April and May on the back of suppressed demand, sources said Monday.

    Market sentiment has centered between a contract price settlement for April of flat to down 4 cents/lb ($88/mt), multiple sources said on the sidelines of the American Fuel & Petrochemicals Manufacturers' annual International Petrochemicals Conference. May could see further decreases of up to 8-10 cents/lb if buyers defer purchases in anticipation of drops, a source with a major polypropylene producer said.

    "At some point it becomes a psychological issue, and if buyers expect decreases, they will hold off purchases as long as they can," said the source, who buys propylene for polymer production.

    Other sources, however, have cautioned that an upcoming turnaround at Flint Hills Resources' 545,000 mt/year propane dehydrogenation unit in Houston could tighten spot availability, limiting any downward movement expected. That turnaround is scheduled to begin in April and last two months, sources said.

    Propylene contract prices rose 10.50 cents/lb -- or 25% -- during the first quarter of 2017, with March closing at a 4 cents/lb increase to 52 cents/lb, the highest level since December 2014 (61.50 cents/lb), according to S&P Global Platts data.

    The increases were fueled by sharp increases in spot pricing for both refinery- and polymer-grade propylene that resulted from tighter supply amid steam cracker and refinery turnarounds.

    Spot refinery-grade propylene rose 175% from December 30, 2016, through March 9, hitting a 26-month high of 46 cents/lb FD USG before sliding 20%, closing Monday at 36.75 cents/lb.

    Spot PGP followed a similar trajectory, up 61% from December through March 8, when it reached a 26-month high of 54.25 cents/lb. Spot pricing has shed nearly 10% since, closing Monday at 49.25 cents/lb FD USG.
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    Toshiba Board Approves Bankruptcy for Westinghouse: Nikkei

    Toshiba Corp.’s board has approved a Chapter 11 bankruptcy filing in the U.S. for its Westinghouse Electric unit after the Japanese company warned of a possible $6.2 billion writedown on the nuclear energy business, Nikkei reported.

    The Pennsylvania-based reactor developer, whose technology forms the basis of about half the world’s atomic units, has been grappling with delays at projects in Georgia and South Carolina, which led to the impairments. Toshiba said this month it may sell a majority stake in the nuclear business. Yu Takase, a spokeswoman for Toshiba, was not immediately available for comment.

    Toshiba said last month it expected to write down 712.5 billion yen ($6.2 billion) in its nuclear-power business, citing cost overruns at Westinghouse and diminishing prospects for atomic-energy operations. The Japanese company’s bond yields jumped at the end of December after it announcedthe potential charge would exceed the initially anticipated amount of $87 million. Toshiba received approval to delay reporting third quarter earnings until April 11.

    Toshiba’s $5.4 billion purchase of Westinghouse in 2006 may have seemed promising at the time. In 2005, the U.S. government gave nuclear developers a package of tax credits, loan guarantees and cost-overrun backstops. Westinghouse signed deals in 2008 to build four reactors for Southern Co. and Scana Corp., the first U.S. nuclear plants since the 1979 accident at Three Mile Island to be approved for construction by regulators.

    But costs for the reactors increased after stricter safety standards were put in place in the wake the 2011 Fukushima nuclear accident in Japan. On top of that, a plunge in natural gas prices has made nuclear generation less attractive.

    Scana and Southern could end up facing billions of dollars in additional costs, according to Morgan Stanley. Scana faces as much as $5.2 billion in higher costs that could drag its shares down 5 percent, analysts at the bank including Stephen Byrd said in a March 22 research note, while cost overruns for utility owner Southern could reach $3.3 billion.

    Westinghouse wants to exit its role as contractor for building two new reactors in Georgia for Southern, the state’s Public Service Commission Chairman Stan Wise said in a phone interview Tuesday. The state’s regulators believe Southern has “appropriate levels of parental guarantees from Toshiba” on the project.

    Japan’s Nikkei reported Monday that Westinghouse has turned to Korea Electric Power Corp. as a sponsor for its reorganization. A spokesman for the Korean company known as Kepco said Tuesday it will consider such a role if requested and that its interested in Toshiba’s NuGen stake in the U.K., the spokesman said, citing President Cho Hwan-eik.

    Westinghouse supplied the world’s first pressurized water reactor in 1957 for a nuclear power plant and has been one of the most prominent companies in the atomic industry. Toshiba, one of Japan’s three biggest reactor suppliers, was banking that the U.S. company’s modular construction design would be easier and faster to execute. The idea was to make reactor components and ship them to construction sites where they could be snapped together, speeding completion.

    Construction for Scana and Southern, however, didn’t go smoothly. Some projects failed regulatory tests, while others fell behind schedule. Work that should have been finished last year or this year were pushed back to 2019 or 2020.

    In February, Toshiba announced it would no longer build new nuclear facilities and would focus instead on supplying parts and engineering. The Japanese company has put its memory chip business up for sale to fill the hole Westinghouse created in its balance sheet.

    Attached Files
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    EU farmers rush to plant sugar, free to seek exports as quotas end

    EU farmers are ramping up production of sugar beet this year when they will be freed at last to grow as much as they want and sell it globally, after a decade of strict output quotas and export limits.

    Farmers have started drilling the first post-quota crop this month in several EU member states, including top EU producer France where planting is expected to increase by 20 percent, in line with an expected rise across the bloc.

    Their return to global trade means European producers will compete for business with emerging beet sugar exporters like Russia and Ukraine, as well as refiners that import cane to make white sugar, such as the United Arab Emirates.

    But it also means farmers now face the sort of risk they have not seen for years: exposure to prices that can go down as well as up. After rallying to a 4-year high in September, benchmark ICE white sugar futures have slumped more than 17 percent, touching their weakest in over 9 months last week.

    "We are bound to see price volatility but that's something we face in other crops as well. This is part of a farmer's job these days. It's up to us to find ways of withstanding it," said Alexandre Pele, whose family has grown sugar beet on a farm 60km south of Paris for more than a century.

    EU farmers say they are now ready to compete globally after the sector was thoroughly restructured, following a 2005 ruling by the World Trade Organization that the EU unfairly subsidized its sugar producers, which led to a sharp cutback of exports.

    For the past decade, Brussels took steps to limit the crop with quotas, while guaranteeing a floor price for farmers. The EU went from exporting nearly a third of its sugar crop to becoming a net importer, under a regime now set to be dismantled in October.

    For their first season of free trade, farmers have so far been offered contracts with a good rate of return, by cooperatives and other buyers that want to encourage planting to build up a surplus for export.

    Pele, who sells through Cristal Union, one of France's main sugar beet buying cooperatives, plans to increase his planting area by around 10 percent this year.

    "We have certain strengths in France after the restructuring of the sugar industry in 2006, so I think we're ready for the world market," he said.

    French sugar cooperative Tereos, which says it collects more than 40 percent of the French crop, expects to boost output by 25 percent. The group said it signed contracts to buy 19 million tonnes of beet from its members in 2017/18, up from 15 million.

    Sowings have also begun for the next season in the EU's number two grower, Germany, where there could be "double-digit" growth in the planted area, said Guenter Tissen, CEO of industry association WVZ.

    Sugar beet sowings are set to climb by one-third in Britain, although this partly represents a rebound after a bumper crop in 2014/2015 forced farmers to scale back planting.

    Under their new contract with processing company British Sugar, farmers will receive a minimum price for their beet, as well as a bonus amount if world sugar prices climb.

    "We have for the first time a sugar beet contract in the UK that does begin to reflect an element of market return," said William Martin, who plans to sow 220 acres of sugar beet in his Cambridgeshire farm this year.

    However, Britain will remain a net importer in the short-term and output in the long term could depend on trade deals struck with major sugar cane producers like Brazil following last year's UK vote to leave the European Union.


    While sugar yields depend on weather, an initial estimate from Green Pool pegs EU production for 2017/2018 at 18.3 million tonnes in white sugar value, with exports of 3.4 million tonnes.

    Platts is forecasting total production for that season at 19.27 million tonnes, with exports estimated at 2.4 million tonnes. By comparison, the European Commission forecasts production at 16.6 million tonnes in the previous 2016/2017 season now coming to a close.

    In the 2005/2006 season, before output was curbed, the EU produced 18.9 million tonnes and exported 7.4 million tonnes, International Sugar Organization figures show.

    Sugar beet is used to produce 20 percent of the world's sugar. While sugar cane is usually cheaper as a raw material for refineries, white sugar from beets can be competitive in international trade when total costs are factored in.

    The EU's return to the global stage is likely to intensify competition in its historically traditional export markets in the Middle East and North Africa, increasingly supplied by cane sugar processed in Dubai, Iraq and Saudi Arabia.

    Central and South Asia could also offer attractive markets for EU exports, although the bloc could run into competition from other emerging exporters like Ukraine and Russia.

    Even with the surge in output, the bloc's aim to re-emerge as a major exporter could be dampened in the short term by dwindling domestic EU sugar stocks, which are poised to fall by more than 50 percent in the current season.

    Worries over domestic supplies deepened this month when the EU approved an additional 700,000 tonnes of out-of-quota sugar for export in the 2016/2017 year.

    "I think there is that drive to export and to stake your claim in the export market," said Erin Burns, senior EU sugar analyst at Platts. "But, until the end of September, the domestic stock situation looks very tight. So what we could see is exports only happening if stocks get to a comfortable level."
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    Monsanto loses legal battle with Indian seed producer

    Monsanto lost a legal battle with one of India's biggest seed producers over a contract dispute on Tuesday, and was ordered to restore a licensing agreement and cut royalty charges.

    The U.S. company's joint venture Mahyco Monsanto Biotech (MMB) took Hyderabad-based Nuziveedu Seeds Ltd to court in 2015, claiming patent infringements and accusing the Indian company of continuing to use Monsanto's technology after MMB had canceled its licensing contract.

    The Delhi High Court ruled on Tuesday that MMB should not have canceled the contract in the first place, and said it must be restored. It also said royalty payments agreed under the original contract must be reduced in accordance with a change in Indian government policy last year.

    "The parties shall remain bound by their respective obligations under the terms and conditions of the 2015 sub-license agreements," R. K. Gauba, the judge, said in the ruling seen by Reuters.

    Under the contract, Nuziveedu Seeds made genetically modified cotton seeds using Monsanto technology. Their dispute has drawn in the Indian and U.S. governments.

    The Indian government last year cut the royalties paid by local firms for Monsanto's Bt, or Bacillus thuringiensis, seeds by about 70 percent, a decision which MMB must now adhere to with Nuziveedu.
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    Precious Metals

    Barrick, Goldcorp team up to develop one of world’s largest gold deposits in Chile

    Canada’s Barrick and Goldcorp, the world’s No.1 and No.3 producers of the precious metal by value, are teaming up to develop projects in northern Chile, particularly Cerro Casale, one of the world’s largest gold-copper deposits.

    As part of the agreement, Barrick has sold a 25% stake in Cerro Casale to Goldcorp, which will result in a 50-50 joint venture focused on building gold mines in Chile’s prolific Maricunga belt.

    Joint venture will allow them to consolidate infrastructure, reduce costs, decrease the environmental footprint and provide better returns than if they had standalone projects.

    The move, a fresh sign that miners are moving from cost-cutting to expanding operations and investing in exploration, also prompted Goldcorp to acquire Exeter Resource Corporation for about $250 million.

    The takeover makes of Goldcorp the sole owner of the Caspiche gold-copper project, conveniently located only 10 km north of Cerro Casale.

    "With the acquisition of Caspiche and 50% of Cerro Casale, we envisage the two deposits being jointly advanced with Barrick, similar to our existing arrangement with Teck Resources at NuevaUnión,” Goldcorp’s President and Chief Executive Officer David Garofalo said in a separate statement.

    He noted the joint venture with Barrick would allow them to consolidate infrastructure to reduce costs, reduce the environmental footprint and provide increased returns compared to two standalone projects.

    Under the terms of the deal, Goldcorp is required to spend a minimum of $60 million in the two-year period following closing of the transaction, and a minimum of $80 million in each successive two-year period until the deferred payment obligation is satisfied.

    If the Vancouver-based gold miner does not spend the minimum in any two-year period, it will instead be required to make a payment to Barrick equal to 50% of the shortfall (with a corresponding reduction in the deferred payment obligation), Goldcorp said.

    This is not the first time the two gold miners work together. In the past, they’ve joined efforts to run the Marigold mine in Nevada, which they ended up selling in 2014 to Silver Standard Resources (TSX:SSO) for $275 million.

    Cerro Casale holds proven and probable reserves of 23.2 million ounces of gold and 58.7 million ounces of silver. It also contains 5.8 billion pounds of copper.

    According to a feasibility study conducted in 2010 by Kinross Gold (TSX:K) (NYSE:KGC), which had a 25% in Cerro Casale until today, the plan was to build an open pit mine with a 20-year life and a heap leach processing operation for an initial capital cost of roughly $4.2 billion.
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    Base Metals

    U.S. launches probe into Chinese aluminium foil imports

    The United States has launched a probe to determine whether imports of Chinese aluminium foil should be subject to anti-dumping and anti-subsidy duties, the Commerce Department said on Tuesday, just weeks after the U.S. foil industry accused the world's top producer of dumping.

    Earlier this month, U.S. producers lodged a petition calling for an investigation and accusing 230 Chinese companies selling almost $400 million worth of foil last year in the United States at discount prices and damaging the sector.

    Estimated dumping margins range from 38.40 percent to 140.21 percent, the U.S. Commerce Department said on Tuesday. 

    Responding to the move, China's commerce ministry on Wednesday urged the United States to conduct a fair investigation and follow guidelines set by the World Trade Organization.

    "Inappropriate use of trade remedy measures will not only harm the export interests of Chinese aluminium foil firms, but also will weaken the competitiveness of the U.S. downstream industries," according to the statement posted on the Chinese commerce ministry's website.

    The U.S. International Trade Commission will make preliminary determinations on or before April 24, the Commerce Department said.

    If the ITC issues affirmative preliminary injury decisions, the investigations will continue and Commerce will make its preliminary determinations on anti-subsidy, or 'countervailing' duties and anti-dumping duties on June 2 and Aug. 16, respectively.
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    Steel, Iron Ore and Coal

    Tropical Cyclone Debbie smashes into Australian Queensland's coal industry

    The coal industry in Australia's Queensland state was hit hard by Tropical Cyclone Debbie on Tuesday, and with heavy rains expected to continue for the coming days, it is too early to tell exactly how bad the damage is, a spokeswoman for the Queensland Resources Council said Wednesday.

    "It is likely the Bowen Basin will still see three to five days of torrential rain and it is not until that rain has fallen and the resulting flood patterns are known that any operational impacts will be apparent," she said.

    An alleviating factor to the potential damage could be the lack of rain that the region has seen recently, she said.

    "The wet season has been pretty dry, therefore, site water storages are not full, and in fact some companies will welcome the late rains," she said. "Experience from previous floods means companies have invested substantially in water management, making sites far more resilient in coping with heavy rainfall events," she said.


    Mining has been temporarily suspended at BHP Billiton's central operations with only minimal personnel on sites for security and essential systems monitoring, a spokesman for the company said Wednesday.

    "We are continually monitoring the situation and plans on when we can safely resume operations will be assessed once the weather eases," he said.

    "[It's] worthwhile noting that while Tropical Cyclone Debbie has been downgraded to a low pressure system, the situation is still quite intense in central Queensland with winds [of over] 100 km/h and 100-250 mm rain expected over the next few days," he said.

    There are also power cuts to coastal towns and flooding is forecast across the region over this week, he added.

    It is understood that the impacted mines include six of BHP Billiton Mitsubishi Alliance's seven, and BHP Billiton Mitsui Coal's two mines.

    BMA, which is 50:50 operated by BHP Billiton and Mitsubishi Development, operates Goonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge.

    BMC, which is 80% owned by BHP Billiton and 20% by Mitsui and Co., owns and operates the South Walker Creek mine and Poitrel mine.

    BMA also owns and operates the Hay Point Coal Terminal near Mackay which was closed in preparation for the cyclone on the weekend.

    The neighboring Dalrymple Bay Coal Terminal and the Abbot Point Coal Terminal further north in Queensland are also closed.

    North Queensland Bulk Ports Corporation said Wednesday morning that they are inspecting the ports for damage.

    The BHP Billiton spokesman said he cannot specify when Hay Point will reopen given that assessments are still being done and the weather is still bad in the region.

    Stanmore Coal also said on Wednesday that its Isaac Plains coal mine has been placed into a protective phase with all mining operations ceased and key assets secured away from mining areas and potential water courses.

    "The mine's port provider has issued a force majeure notice as part of their preparations to protect key assets and infrastructure," the company said.

    "At this stage the company anticipates production will be impacted for the rest of the week, assuming no material damage is sustained to key mine assets or those assets of the mine's critical suppliers, including rail, port, water and power," it said.

    Glencore also said earlier in the week that it has ceased operations at its Collinsville and Newlands mines.

    Other miners in the region, such as Rio Tinto and Wesfarmers, were not available for immediate comment.

    Tropical Cyclone Debbie made landfall Tuesday afternoon Australian Eastern Standard Time as a category 4 cyclone, which is the second highest on the Bureau of Meteorology's scale, the Australian bureau said Tuesday.

    It has since been downgraded to a tropical low.

    "Impacts due to heavy rain, damaging wind gusts, and abnormally high tides are still expected across a broad area," BOM said Wednesday.
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    China Feb thermal coal imports up 28.06pct on year

    China imported 6.48 million tonnes of thermal coal (including bituminous and sub-bituminous coal) in February, rising 28.06% year on year but down 32.36% month on month, showed the latest data released by the General Administration of Customs.

    The value of the imports totalled $476.72 million, translating to an average import price of $73.57/t, rising $41.07/t from a year ago but down $5.83/t from the month prior.

    Total thermal coal imports surged 47.2% from a year ago to 16.06 million tonnes over January-February. Total import value skyrocketed 264.41% year on year to $1.24 billion.

    China imported 5.05 million tonnes of lignite in February, surging 33.25% year on year but down 28.77% from the month before, with the value increasing 179% from the preceding year to $228.47 million.

    Total lignite imports grew 52.96% year on year to 12.13 million tonnes in the first two months this year, with the value up 235.63% from the year prior to $568.82 million.
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    Indian antitrust regulator fines Coal India for anti-competitive practices

    India's antitrust regulator, the Competition Commission of India, has imposed a fine of Rupee 5.91 billion ($90.92 million) on state-run miner Coal India Limited (CIL) and its subsidiaries for abusing its dominant market position.

    In a 56-page order released Friday, CCI said that CIL did not finalize the terms and conditions of fuel supply agreements (FSAs) through a mutual bilateral process and the same were imposed upon the buyers through a unilateral conduct.

    The CCI also found CIL and its subsidiaries to be in contravention of the provisions of the Competition Act for imposing unfair/discriminatory conditions in the supply of non-coking coal to power producers.

    Besides ordering CIL and its subsidiaries to cease and desist from anti-competitive practices, the CCI also directed modification of the FSAs and to ensure uniformity between old and new power producers as well as between private and state-run power producers.
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    Vale sells stake in Moatize coal mine to Mitsui

    Brazilian miner Vale SA has wrapped up the sale of a stake in Mozambique's Moatize coal project to Japan's Mitsui & Co Ltd and received an initial payment of $733 million, Reuters reported on March 27, citing a security filing from the company.
    The remainder of the $770 million transaction will be paid after the financing for the mine and the transportation system is concluded, according to Vale.
    The Japanese company bought 15% of Vale's 95% share in the coal mine. It is also acquiring 50% of Vale's 70% stake in the Nacala logistics corridor, a railway system connecting production at the mine to the Nacala port in Mozambique.
    Vale has been in talks with Mitsui over the Moatize mine for almost three years. But the firms previously had said that any payments or the conclusion of the deal would only take place once financing was sealed.
    Mitsui will have an option to transfer back to Vale the stake in the project if financing is not completed by December.
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    China's Liaoning pledges 10 million tonnes low-grade steel closures by June

    The northeastern Chinese province of Liaoning has promised to close more than 10 million tonnes of low-grade steel capacity by the end of June this year as part of its efforts to clean up the sector, the official Liaoning Daily reported on Tuesday.

    Heavy industrial Liaoning, home to struggling state steel mills like the Anshan Group and the Benxi Iron and Steel Group, is a key part of China's strategy to tackle price-sapping overcapacity in the coal and steel sectors.

    However, the province has struggled to find alternative sources of growth. Its economy shrank 2.5 percent last year, the only Chinese province to see a contraction.

    The low-grade steel closures are also part of a nationwide pledge to eliminate a type of dangerous and polluting production capacity that accounts for about 4 percent of total output.

    Liaoning also aims to shut all coal mines with annual production capacity of less than 90,000 tonnes by the end of the year, a move that will cut coal provincial production capacity by 9.59 million tonnes, the report said.

    Liaoning has been ordered to close 30.4 million tonnes of coal capacity over the 2016-2020 period, Liaoning Daily reported. It shut 44 mines last year and cut production capacity by 13.6 million tonnes.
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    CISA members' Feb steel output down 4.28% YoY

    Member companies of China's Iron and Steel Association (CISA) sold 46.2 million tonnes of steel products in February, climbing 16.47% year on year, showed data from the association.

    In the first two months of 2017, total sales of steel products rose 7.89% from the year-ago level to 89.55 million tonnes.

    In February, CISA members' steel billet sales decreased 8.08% year on year to 2.16 million tonnes; total steel billet sales decreased 11.34% from the previous year to 4.29 million tonnes over January-February.

    The CISA members had 14.02 million tonnes of steel products by the end of February, down 4.28% from year-ago level and 5.83% month on month, showed the data.

    The stocks of steel billet posted a year-on-year decrease of 2.46% to 2.91 million tonnes by end-February, which was down 2.71% month on month.
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    US imported rebar prices soften

    US imported rebar prices softened Monday alongside lower Turkish export offers, sources said.

    S&P Global Platts on Monday lowered its daily imported rebar assessment to $464-$474/st CIF Houston, down from $468-$478/st CIF.

    Lower scrap settlements and modest demand throughout the Turkey's export markets have depressed offers from previous highs, market participants said.

    Both Turkish mills and traders have reduced prices, a US-based trader said. A US-based distributor put current Turkish import pricing in the US at $505-$515/mt CFR Houston ($464-$474/st CIF), while offers for June arrival were around $520/mt CFR ($478/st CIF).

    Demand for rebar throughout March has been slower than expected in the US, the distributor said.

    "We haven't seen demand kick off, so we are anxiously awaiting to see it in April," he said.

    US-based sources were keeping an eye on the scrap market as a signal to what may happen with both import and domestic pricing in the US. East Coast US scrap exporters have been looking to place tons in the US market to take advantage of stronger US scrap pricing as US bulk export pricing to Turkey, which peaked at $303/mt CFR following a sale March 7, had fallen to around $270/mt CFR HMS 80:20 basis last week.
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