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Business Recorder
3 days ago
- Business
- Business Recorder
Global LNG: Asian spot prices flat as weak demand, rising Europe supply caps gains
SINGAPORE: Asian spot liquefied natural gas (LNG) prices were flat this week after three weeks of gains, as low demand from Asian buyers and increased supply in Europe capped gains. The average LNG price for July delivery into north-east Asia was at $12.40 per million British thermal units (mmBtu), industry sources estimated. Despite extremely weak production at Malaysia's Bintulu export terminal, which had been undergoing maintenance and delaying shipments, demand in Asia has also been soft with limited appetite this week, said Martin Senior, head of LNG pricing at Argus. 'Prices (are) still out of reach of price sensitive buyers in Asia, with limited requirements posted this week,' he said. Buying interest seems to be stemming primarily from trading houses and portfolio majors, added Masanori Odaka, senior analyst at Rystad Energy. 'If prices fall another $1/mmBtu, then we will see interest from some Asian buyers,' he said, adding that while the arbitrage for U.S.-sourced LNG to Asia is closed this week, factoring in full shipping, the arbitrage for Nigeria supply to Asia is open. S&P Global Commodity Insights assessed its daily North West Europe LNG Marker price benchmark for cargoes delivered in July on an ex-ship basis at $11.211/mmBtu on May 29, a $0.52/mmBtu discount to the July gas price at the Dutch TTF hub, with ample waterborne LNG cargoes and pipeline supply easing sentiment. Global LNG: Asian spot LNG prices rise to two-week high amid renewed demand Argus assessed the price for July delivery at $11.30/mmBtu, while Spark Commodities assessed the June price at $11.175/mmBtu. 'Improving renewables supply and recovering pipe-gas flows from Norway to the continent worked in tandem with an influx of LNG to meet the current demand across Europe,' said Aly Blakeway, manager of Atlantic LNG at S&P Global Commodity Insights. 'For now, European demand remains relatively sluggish with procurements of LNG and the pace of injections seeing a relative slowdown on the week.' Meanwhile, the U.S. arbitrage to northeast Asia via the Cape of Good Hope decreased this week, but still pointed towards Europe, said Spark Commodities analyst Qasim Afghan. The U.S. arbitrage to northeast Asia via Panama closed out for the first time in over three weeks, and is now also marginally pointing to Europe. In LNG freight, Atlantic rates dropped for a fourth straight week to $29,500/day on Friday, while Pacific rates held steady at $20,750/day, he added.
Edmonton Journal
5 days ago
- Business
- Edmonton Journal
Varcoe: Throne speech confirms 'energy superpower' goal, but what major projects will be fast-tracked by Ottawa?
Article content 'The government of Canada has to be really clear what the objective is. If it's leverage and optionality and the maximization of value — and what is the lowest cost and quickest way to do that — I'd say a shorter distance pipeline is the way to think about it,' Kevin Birn, chief analyst of Canadian oil markets for S&P Global Commodity Insights, said Tuesday. 'If they're talking about energy security for the rest of the country, there might be different considerations . . . What's the clarity of the objective? What's No. 1 here?'
Calgary Herald
5 days ago
- Business
- Calgary Herald
Varcoe: Throne speech confirms 'energy superpower' goal, but what major projects will be fast-tracked by Ottawa?
Article content The new federal throne speech reconfirmed the Carney government's objective that Canada will become the 'world's leading energy superpower in both clean and conventional energy.' Article content Article content To do so will require new investment and infrastructure capable of producing and exporting more energy to the world, and policies that allow it to happen. Article content Article content Article content Speaking in Calgary last week, Energy and Natural Resources Minister Tim Hodgson also said he wants to see some projects built that are 'quick wins.' Article content And he wants to see better supply security in Eastern Canada. Article content 'The government of Canada has to be really clear what the objective is. If it's leverage and optionality and the maximization of value — and what is the lowest cost and quickest way to do that — I'd say a shorter distance pipeline is the way to think about it,' Kevin Birn, chief analyst of Canadian oil markets for S&P Global Commodity Insights, said Tuesday. Article content 'If they're talking about energy security for the rest of the country, there might be different considerations . . . What's the clarity of the objective? What's No. 1 here?' Article content Article content Those are good questions. Article content Article content In Tuesday's throne speech, the answer of how the Carney government will get energy infrastructure built included some signals, but few details. Article content The speech, read by King Charles III, said the federal government will work with provinces, territories and Indigenous people to identify projects of national significance that can 'deepen Canada's ties with the world.' Article content The Liberal government also reiterated its campaign promise to create a major projects review office and ensure it will issue development decisions within two years, instead of five. Article content 'This is a federal government that wants to build things,' said Adam Legge, president of the Business Council of Alberta, which held a roundtable meeting with Hodgson on Friday.
Scientific American
5 days ago
- Business
- Scientific American
Republican Megabill Called a ‘Nightmare Scenario' for Clean Energy
CLIMATEWIRE | The clean energy transition may soon be on its own. The "One Big Beautiful Bill Act" passed last week by the House would effectively end most clean energy tax credits, reversing a large chunk of former President Joe Biden's climate agenda. Wind and solar projects would need to begin construction within 60 days of the bill's passage — or start operations within two years — to receive the credits before they expire. Clean energy factories that use Chinese inputs or equipment would essentially be barred from receiving federal money. Tax credits for electric vehicles would be gone entirely by the end of next year. On supporting science journalism If you're enjoying this article, consider supporting our award-winning journalism by subscribing. By purchasing a subscription you are helping to ensure the future of impactful stories about the discoveries and ideas shaping our world today. 'It is definitely massive headwinds,' said Sam Huntington, director of North American power research at S&P Global Commodity Insights. 'If the bill goes through as the House has set it up, that is a pretty bleak scenario for the next few years, at least.' S&P estimates cumulative wind, solar and battery installations would fall 20 percent through 2040. BloombergNEF has called the House bill — which still needs to clear the Senate — 'the nightmare scenario for US clean energy advocates.' Many analysts think the bill's spending cuts will be watered down in the Senate. ClearView Energy Partners, a research firm, termed the bill 'a high water-mark' for rollbacks in a note to clients. But the U.S. policy direction is clear. As climate change accelerates, Republicans are slowing efforts to green the energy system. Some analysts argue it was always unrealistic to transform an energy system that powers factories, fuels cars and heat homes in the short time frames set by Democrats' 2022 climate law, the Inflation Reduction Act. The tax credits for electric vehicles, for instance, have not fundamentally altered gasoline demand, which has remained steady despite an uptick in EV sales, said Robert McNally, president of the Rapidan Energy Group. At the same time, analysts say the clean energy transition is already on its way — with or without financial incentives. Arjun Murti, a partner at the research firm Veriten, predicted electric vehicles and zero-carbon electricity resources like solar and batteries would continue to grow over the next 30 years, even if deployments do not reach levels projected in net-zero emission models. Both technologies are mature and increasingly competitive with fossil fuel resources, he said. 'Solar plus batteries and electric vehicles are two areas where you're going to get growth with or without tax credits,' Murti said. 'People are too pessimistic on these new technologies assuming they need all the financial and fiscal support.' 'There are good reasons,' he added, 'to use them other than climate change.' Emissions backslide The math of a warming planet is unrelenting. The United Nations International Panel on Climate Change has said the risks of extreme weather like floods, drought and wildfire increase each time the world warms by a tenth of a degree. Planet-warming emissions reached a record 37.5 billion metric tons in 2024, according to the Global Carbon Project. The world has six years at 2024 levels before global temperatures are likely to surpass 1.5 degrees Celsius and 27 years before they eclipse 2 degrees, GCP estimated. Emissions growth has slowed in recent years, but greenhouse gas levels have still edged higher thanks to a predictable pattern. While emissions in the U.S. and Europe fell, they grew in developing countries, particularly China and India. Those patterns may be changing. There are emerging signs of a structural emissions plateau in China, where electric vehicle adoption is surging and the country is bringing on large amounts of renewable electricity to complement its massive coal fleet. Indian emissions continue to rise on the back of rising coal consumption. The U.S., meanwhile, may be on the verge of backsliding. American emissions have trended downward for most of the last 15 years, including President Donald Trump's first term, thanks to the combination of cheap natural gas, rising renewables deployments and stagnant electricity demand, which led to a wave of coal plant retirements. But electricity demand is skyrocketing now, amid a boom in artificial intelligence and data centers, prompting America's remaining coal plants to run harder and fueling increased demand for natural gas. Three months is not enough time to constitute a trend, but the first quarter of 2025 offers a window of the potential road ahead. U.S. emissions were up 5 percent, or by 62 million tons, compared to the first quarter of 2024, according to Carbon Monitor, an emission tracker. Half of that increase was due to rising emissions from the power sector, the industry most responsible for declining U.S. emissions in recent years. That is the climate backdrop for discussions over Republicans' budget bill. Analysts said solar is by far the best placed of U.S. clean energy industries to weather the storm. Even accounting for Trump's recent tariffs, solar is likely to remain economically competitive with gas, analysts said. But the picture is cloudier for batteries and downright gloomy for wind. Manufacturing of stationary batteries used in the power sector is dominated by China, making them uniquely vulnerable to Trump's trade war. Wind projects already faced siting and transmission challenges before Trump took office and Congressional Republicans took an ax to the IRA's tax credits. The IRA provided generous subsidies to entice companies to make components for clean energy industries in the U.S. But strict limits on foreign entities of concern, namely on China, will make it hard for clean energy manufacturers to claim those credits, said Antoine Vagneur-Jones, head of supply chain research at BNEF. Five years ago, the economic and political stars appeared to be aligned for climate action, said McNally, the Rapidan analyst. Interest rates were low, meaning financing for clean energy projects was cheap. The world was not beset by any major wars. And large countries were led by governments prioritizing climate change. Today, interest rates are high. Wars in Ukraine and the Middle East have prompted countries to prioritize energy security and affordability. And populist governments are in power in much of the world, McNally said. 'Every one of those stars have gone out,' he said.
Business Times
6 days ago
- Business
- Business Times
Iron ore stays relevant despite China's faltering property sector as demand drivers evolve
[SINGAPORE] Iron ore, the backbone of China's steel-fueled boom for more than two decades, is facing a pivotal demand shift. The ferrous metal's fortunes are now decoupling from the country's property sector to hinge more on infrastructure projects and high-tech machinery demand, a shift reflecting broader economic trends in China, Tan Tee Yong, head of commodity derivatives of SGX Group, told The Business Times. The demand for iron ore, as a crucial raw material in steel production, will be supported by China's growing emphasis on 'electrification, digitalisation and greenification – sectors that are inherently steel and iron ore-intensive', he added. In China, the infrastructure sector will overtake property to be the biggest end-user sector for steel in 2025, based on a report by S&P Global Commodity Insights, raising forecasts for infrastructure consumption for both 2025 and 2026 to 234 million tonnes and 227 million tonnes, respectively. Paul Bartholomew, senior analyst of metals and mining research of S&P Global, highlighted that the Chinese government has announced plans to improve the country's water infrastructure, while its infrastructure investment remained steady in the March quarter, government data indicated. On the other hand, steel consumption in the property sector is expected to fall 8 per cent in 2025, an improvement from an almost 12 per cent year-on-year decline in 2024, said Bartholomew. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Beyond China While China's demand for steel – which is estimated to drop 2 per cent on the year by S&P Global Commodity Insights – is slowing, market watchers have seen rising demand for steel and subsequently iron ore, its primary raw material, elsewhere in the world. 'Beyond China, urbanisation and industrialisation continue to drive demand for iron ore globally,' said SGX's Tan, adding that regions such as Asean and India, in particular, are emerging as key growth markets for the ferrous metal. S&P Global's Bartholomew noted that India, which is adding at least another 30 million tonnes per year of steel capacity over the next five years, is still in steel production growth mode. Facilities in the Middle East and Europe under construction, accounting for about 50 million tonnes of direct reduced iron in the respective region, will also require high-grade iron ore. 'So while China is inevitably slowing, there will be growing demand for iron ore from other regions,' as reflected by the massive investment in the Simandou high grade iron ore project in Guinea, noted S&P Global's Bartholomew. Unexpected portfolio diversifier For institutional investors, iron ore could be more relevant as an unexpected diversifier in a balanced portfolio of 50-50 stocks and bonds, indicated a report released by S&P Dow Jones Indices in collaboration with SGX Group on Tuesday (May 27). Iron ore, proxied by the S&P GSCI Iron Ore index, was found to improve the risk-adjusted returns of the balanced portfolio. Sharpe ratios, with its higher values indicating the more attractive risk-adjusted returns, would be improved by 7 per cent to 19 per cent, with optimal weight of iron ore ranging from 4 per to 9 per cent, said the report. Among the four commodities studied – iron ore, gold, crude oil and copper – iron ore is the only one that provided an increase in potential return while reducing the strategy's volatility, for weighting up to 5 per cent. 'Beyond the 5 per cent weighting, iron ore continued to provide increased return, albeit also introducing higher volatility. Other commodities by contrast, offered a reduction in volatility at the expense of some return,' said the report. The report also found that iron ore's historical edge also came from persistent backwardation, where near-term prices topped futures, allowing investors holding contracts over time to profit by rolling contracts at lower prices. This positive roll-yield, rare in commodities, amplified returns for a long-holder even with small allocations, while cushioning volatility. Prices for iron ore, which soared nearly tenfold during China's construction frenzy, are now under pressure from a prolonged property slump and the economy's tilt towards services. BMI expects iron ore prices to be weighed down by a subdued demand outlook, while remaining supported by renewed optimism over easing trade tensions. In a report released on May 15, the team maintained its 2025 iron ore price forecast at an annual average of US$100 per tonne, a 3.6 per cent year-on-year decrease from estimated 2024 average price of US$103.7 per tonne.
