Energy and Natural Resources Market Diary (November 1, 2010)
Strengths
- China’s imports of copper concentrate climbed to a record in September as smelters ramped up production in response to rising treatment charges. Inbound shipments jumped to 683,523 metric tons last month, up 22 percent year-over-year, the customs office said.
- World refined copper was in a deficit of 356 thousand metric tons year-to-date through July, compared with a deficit of 164 thousand metric tons in the same period in 2009, according to the International Copper Study Group.
- September imports of coking coal into China hit their highest levels since January of this year. China imported 4.17 million metric tons, up 7.5 percent sequentially according to Customs data.
Weaknesses
- Vietnam’s coal exports in 2011 are projected to drop 5.6 percent from this year to 17 million metric tons, a state-run newspaper said on Tuesday, as the country seeks to save more for domestic consumption. Coal exports would drop gradually to between 3 million and 4 million tonnes by 2015, the Rural Today newspaper said, citing an Industry and Trade Ministry report.
- China’s daily crude steel output fell further to 1.56 million metric tons in the second ten days of October, down 3.9 percent from early October, according to the China Iron & Steel Association.
Opportunities
- Russia, the world's top oil producer, will need over 8.6 trillion rubles ($280 billion) to keep pumping oil at current record levels until 2020, Prime Minister Vladimir Putin said on Thursday. “This is not an easy task,” Putin told a meeting of oil industry top managers and government officials. Putin was chairing a government meeting on a new 10-year energy strategy, which seeks to stave off output declines and encourage investment as the heartland of the Russian oil industry, the Soviet-era fields of West Siberia, goes on the wane.
- India, Asia’s second-fastest-growing major economy, may face a shortage of 60 million metric tons a year of power-plant coal by the year ending March 2012, as domestic output falls short of demand, Enam Securities Ltd. said.
- India, the world’s third-largest iron-ore exporter, should ban shipments overseas to ensure that local steelmakers have adequate supplies of the raw material, according to Steel Minister Virbhadra Singh. The country will need increased quantities of iron ore to meet domestic demand from steel producers, so there was a need for a ban, Singh said at a seminar in New Delhi this week.
- South Africa opened public hearings on a $125 billion energy plan to shift from dependency on coal while avoiding major price increases and a repeat of paralyzing blackouts in 2008. The draft plan proposes nearly halving the share of coal in the country’s energy mix to 48 percent by 2030, down from about 90 percent, using nuclear power and renewable energy such as wind and solar to make up the difference.
Threats
- Halliburton Co. may face increased liability in the Gulf of Mexico oil spill after the staff of a U.S. presidential panel said the contractor knew cement it mixed for BP Plc’s well was unstable. The staff of the National Commission on the BP Deepwater Horizon Oil Spill said documents provided by Halliburton showed at least three tests of the mixture, in February and April, found the recipe wasn’t stable. BP received data in March from at least one of the tests, the commission staff said in a letter this week.
