Energy and Natural Resources Market
Strengths
- The Baker Hughes weekly rig count climbed by 28 rigs in the United States to a 52-week high of 1,373 drilling rigs.
- U.S. crude steel output totalled 1.66 million short tons last week, up 0.9 percent, with mills operating at an average capability utilization rate of 68.6 percent. This was the highest weekly total since late-October 2008.
- Global steel production increased by 2.1 percent on a sequential basis to 109.2 million metric tons for the month of January or the equivalent of 1.286 billion metric tons annualized. This is compared with 107.0 million metric tons during the month of December or 1.259 billion metric tons on an annualized basis.
Weaknesses
- A key leading indicator of non-residential construction in the domestic market, the American Institute of Architects (AIA) Billings Index declined to a reading of 42.5 for January from 45.4 in December.
Opportunities
- Bloomberg news reported Indian Finance Minister Pranab Mukherjee said that the country will spend about $1.1 billion on expanding electricity capacity in the year ending March 2011. It also plans to introduce a coal regulatory authority. Over 75 percent of the country’s electricity is powered by coal.
- China Industry news reported that China will likely add another 85 gigawatts of installed power generation this year to bring the country’s total to about 950 gigawatts by year-end.
Threats
- South African state-owned power generator Eskom has been granted permission to annually raise electricity prices by 25 percent over a three-year period, following protracted negotiations.
