Tag: lithium

Best in Energy – 23 May 2023

Germany to subsidise industrial power (Reuters)

Boeing sceptical on sustainable aviation fuel (FT)

U.S. western states in Colorado river deal (WSJ)

Ford’s procurement deals for lithium (FT)

Ocean shipping container production falls (FT)

U.S. retailers near end of destocking cycle (WSJ)

EUROZONE manufacturers have reported another widespread decline in business activity so far in May. Preliminary results show the purchasing managers’ index slipping to 44.6 (6th percentile for all months since 2006) in May down from 45.8 (8th percentile) in April and 54.6 (67th percentile) a year ago. The index is firmly in recession territory at the lowest level since the first wave of the pandemic in March-May 2020 and before that July 2012 and October 2008-June 2009 following the financial crisis:

EUROPE’s gas storage is refilling more slowly than average as a result of a relatively cold start to spring and sharply lower prices encouraging more consumption by industry and power generators. Storage sites across the European Union and United Kingdom (EU28) topped up their fill by +10.3 percentage points between March 31 and May 21 compared with a prior ten-year average top up of +11.3 percentage points. But because storage started from a record high, fill remains exceptionally high. EU28 storage was 65.9% full on May 21, the second highest on record, and compared with a prior ten-year seasonal average fill of just 44.7%:

Best in Energy – 22 May 2023

China’s lithium futures prices rebound (Reuters)

Nigeria starts up major new oil refinery (Reuters)

California approves more transmission (Reuters)

U.S. military to indigenise explosives supply (WSJ)

Asia LNG imports rise following price drop (Reuters)

Argentina oilfield workers strike on safety (Reuters)

Crude oil prices are falling in real terms (Bloomberg)

Russia’s oil output increasingly opaque (Bloomberg)

Russia/Asia energy trade volume rises  (Bloomberg)

EUROPE’s front-month gas futures price has fallen below €30 per megawatt-hour from €77 at the start of January 2023 and a record of almost €340 in August 2022. Gas inventories are plentiful following a mild winter and cuts in industrial consumption. As a result storage is on course to be full well before next winter starts. Prices are declining to stimulate industrial demand and divert LNG to more price-sensitive customers in South and East Asia:

U.S. OIL DRILLING is slowing in response to the fall in prices since the middle of 2022. The cyclical upturn in drilling activity that started after the end of the first wave of the pandemic in August 2020 is likely over. The number of active rigs targeting oil-rich formations fell to 575 over the seven days ending on May 19 down -11 compared with the previous week and by a total of -52 compared with the early December 2022:

Best in Energy – 26 April 2023

[MUST READ] Chile’s lithium strategy (Reuters)

[MUST READ] Global supply chain length (NBER)

EU sets sustainable aviation fuel goal (Bloomberg)

Chile’s lithium participation plan (Reuters)

India gains from cheap Russia oil (Reuters)

U.S. gas stock draw in winter 2022/23 (EIA)

Tesla’s price-cutting strategy (Bloomberg)

Nordic transmission grid incident (Reuters)

EUROPE’s summer-winter gas futures calendar spread between July 2023 and January 2024 has slumped into a contango of more than €17 per megawatt-hour down from €4 on December 30 and a backwardation of €3 at the start of last winter on October 3. Storage is expected to become full well before the end of the traditional refill season in late October or early November. Nearby futures prices are falling to encourage more consumption this summer and divert cargoes to price-sensitive buyers in Asia. But prices in the middle of next winter are still expected to be high given limits on the total amount of gas that can be stored and released and the consequent need for demand restraint in December 2023 and January 2024:

NORTHWEST EUROPE has experienced a slightly colder-than-normal start to the gas refill season, limiting the volume added to storage and forestalling a sharper fall in futures prices and deeper contango. Average daily temperatures at Frankfurt in Germany have been -0.6°C below the long-term seasonal average so far in April:

Best in Energy – 24 April 2023

Semiconductor firms set for long downturn (FT)

China aluminium output hit by drought (Reuters)

South Korea’s interest in nuclear weapons (BBC)

Gold reserves benefit from rise in sanctions (FT)

Chile focus on direct lithium extraction (Reuters)

Wind farms look to deeper offshore sites (Reuters)

JAPAN‘s LNG stocks ended January at 2.34 million tonnes, the highest for the time of year for at least eight years. Stocks remained plentiful even though the first part of winter was colder-than-average in Tokyo:

Best in Energy – 21 April 2023

[MUST READ] U.S./China diplomacy (U.S. Treasury)

U.S./China systemic competition and guardrails (FT)

Chile’s plan to nationalise lithium industry (Reuters)

Saudi Arabia’s non-alignment policy (Foreign Policy)

Bangladesh hit by heatwave and power cuts (Reuters)

China’s state-owned refiners buy Russia oil (Reuters)

Northeast Asia’s rise in floating LNG stocks (Reuters)

U.S. wind turbines: rollout and supply chain (Reuters)

China likely to issue more oil export quotas (Reuters)

U.S. insurers cancel cover for tanker firm (Bloomberg)

Mexico’s petroleum production stabilises (EIA)

EUROZONE manufacturers have reported a widespread decline in business activity this month. Preliminary results from the purchasing managers survey show the composite activity indicator slipping to 45.5 (8th percentile for all months since 2006) in April down from 47.1 (17th percentile) in March and 55.5 (76th percentile) a year ago. Eurozone manufacturers are now unambiguously in recession as they struggle with high energy prices, rising interest rates, excess inventories and heightened caution from household and business buyers:

NORTHEAST ASIA’s LNG prices continue to fall amid plentiful inventories in both North Asia and Europe after a mild winter at both ends of Eurasia. Futures prices for LNG to be delivered in July 2023 have fallen below $13 per million British thermal units, the lowest for 15 months since January 2022, before Russia’s invasion of Ukraine:

Best in Energy – 22 March 2023

Russia’s oil export prices become opaque ($FT)

Russia’s oil exports find new middlemen ($FT)

U.S. refiners to prioritise future distillate growth

U.S. commercial real estate problem loans ($WSJ)

Central banks’ bond purchases and bank failures

La Niña fades but timing of El Niño still uncertain

Lithium prices slump ($BBG)

U.S./China economic coercion

U.S. BUSINESS INVENTORIES remained elevated in January as manufacturers and distributors struggled to work down excess stocks despite an acceleration in retail sales. Reducing unplanned inventories is likely to take at least another six months, even if the economy avoids a recession, which will keep freight volumes under pressure until the third quarter of 2023:

Best in Energy – 28 February 2023

Russia’s oil export revenue and sanctions impact

Japan’s opposition to nuclear power falls ($BBG)

BP transfers statistical review to new publisher

Lithium prices tumble as bubble bursts

China’s pensions and population ageing

Yemen’s stricken oil storage tanker ($FT)

GLOBAL INDUSTRIAL PRODUCTION was essentially flat in December 2022 compared with December 2021, as output deteriorated through the latter part of 2022 in response to rising inflation, faltering consumer and business purchases of merchandise, and efforts to reduce excess inventories. Output growth has slowed to rates consistent with the onset of recessions in 2001, 2008 and 2020, though also with mid-cycle slowdowns in 2012 and 2015 from which the economy re-accelerated:

Best in Energy – 22 February 2023

EU gas consumption fell 19% in Aug-Jan period

U.S. Treasury outlines Russia sanctions strategy

China’s renewable energy deployment (trans.)

Iberia’s gas and power markets remain isolated

Kazakhstan plan to export oil via Russia ($BBG)

Freeport LNG obtains approval for partial restart

Derivatives go dark after cyber-attack ($BBG)

U.S. commercial property in recession ($WSJ)

Lithium prices retreat from record high ($FT)

Australia/China coal shipments resume

BRENT’s front-month futures price has fallen to $82 per barrel down from a high of $127 at the end of May 2022, after adjusting for inflation. But is that still fairly high or already below the long-term average? It depends whether or not the comparison includes the long period of low prices in the 1990s. In real terms, $82 is in the 65th percentile for all months since 1990, still fairly high. But if the 1990s are excluded, prices are in the 42nd percentile for all months since 2000 and the 48th percentile for all months since 2010, already in the lower half of the distribution:

Best in Energy – 25 January 2023

China’s quota system for oil import and exports

U.S. refinery margins strengthen on maintenance

Northeast Asia boosted coal imports in December

Brazil’s hydroelectric dams are brim full ($BBG)

U.S. air freight moves to secondary hubs ($WSJ)

U.S. temporary employment is declining ($WSJ)

Lithium producers anticipate long boom ($FT)

U.S. oilfield services see multi-year boom ($FT)

SINGAPORE’s inventories of distillate fuel oils have stabilised and increased slightly since nearing a multi-year low under 7 million barrels in early November. The increase has coincided with an acceleration of diesel exports from China and a slowdown in freight movements which have relieved some of the regional shortage. Nonetheless stocks are still -2.5 million barrels (-24%) below the prior ten-year seasonal average:

Best in Energy – 16 December 2022

Lithium prices double on output deficit

Global coal consumption hits record high

China braces for impact of rural epidemic

ICE warns it could relocate TTF gas futures

Russia crude sold to India under $60 ($FT)

China experiences intense cold snap (trans.)

Texas oil production hit by seismicity limits

EUROPE’s seven-largest gas consuming countries (excluding the United Kingdom) reported consumption was down -21% in October compared with the same month a year earlier, and down by a similar percentage compared with the ten-year average, as a result of high prices, conservation, and milder-than-normal temperatures in the second half of the month:

U.S. MANUFACTURING output shows signs of peaking. Production was up by just +1.4% in November compared with the same month a year earlier, the smallest increase for almost two years, and the growth rate has been decelerating progressively since February: