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China traders hunt for coal price directions as Beijing reins in data providers

By Muyu Xu and Chen Aizhu

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China traders hunt for coal price directions as Beijing reins in data providers
© Reuters. FILE PHOTO: An aerial view shows machinery working in an open-pit coal mine in Ejin Horo Banner, Ordos, Inner Mongolia Autonomous Region, China, October 19, 2021. Picture taken with a drone. China Daily via REUTERS

By Muyu Xu and Chen Aizhu

BEIJING/SINGAPORE (Reuters) – Chinese coal traders say they are scrambling for price information on spot transactions, relying on personal communications as Beijing steps up scrutiny amid efforts to tame prices.

The country’s top economic planner, the National Development & Reform Commission said this week it would investigate coal and energy index providers over spreading “fabricated” price information. The agency is also studying a new mechanism to guide coal prices within a reasonable range over the long term.

The heightened scrutiny adds strains to the Chinese coal trading community, which is already struggling to keep up with rapid market and regulatory changes in the world’s top coal consumer. The pricing confusion also compounds the country’s worst power crunch in years, which is hampering industry while Beijing tries to lead a recovery from the pandemic.

Beijing has since September unleashed a raft of measures – from ordering mines to immediately boost production to liberalising thermal power pricing.

“We stopped reading domestic indexes for a while as they are confusing. We now just call up other traders to get the daily prices,” said a Guangxi-based coal trader, who like others interviewed for this story declined to be named because of the sensitivity of the matter.

China began tightening rules for commodity index providers in June to tame red-hot prices of products ranging from to iron ore. The recent move on coal intelligence providers was spurred by stubbornly high prices of the key electricity-generating fuel.

Benchmark Zhenzhou thermal coal futures last traded down 10% at 1,144 yuan around 0700GMT on Wednesday, in a sixth straight day of declines following Beijing’s cooling measures. But the price has still more than doubled this year.

(For graphic on China spot and futures coal prices – https://fingfx.thomsonreuters.com/gfx/ce/myvmngrgapr/Pasted%20image%201635302435018.png)

Data such as coal consumption at major power plants and stock levels at key ports was once available on providers’ websites or shared widely on social media.

That information has for months been either hidden behind paywalls or no longer published, traders said.

Instead, traders and analysts have had to rely on personal communications, or use international prices for a gauge.

“We’re now using free-on-board Indonesia prices plus shipping cost and others to calculate delivered prices at power plants, to have a rough clue,” said a Beijing-based power analyst.

Some providers continue to update spot coal transaction data using numbers barely changed from months ago.

“Some pricing indexes still put out daily assessments, but with prices that are way off real transactions,” said a Beijing-based coal trader. “There is almost no reliable prices indexes we can quote now.”

The China Coal Transportation and Distribution Association, which represents coal sellers and shippers, and is a data provider, on Wednesday posted online its reference prices of spot Bohai Rim thermal coal of 5,500 kcal at 946 yuan a tonne, unchanged since mid-August.

The website of consultancy Fenwei Digital Information Technology as of Wednesday also showed some coal prices unmoved at about 1,000 yuan a tonne since at least July.

By comparison, deals were made last week at the main spot trading zone Bohai Rim at over 2,000 yuan and the southern port of Guangdong at over 2,500 yuan, traders told Reuters.

A representative with the China Coal Transport and Distribution Association said it continues to update prices and declined to comment further. Fenwei declined to comment.

NDRC did not immediately respond to requests for comment.

Chinese data providers have been laying low since June, when Beijing issued new rules telling them to provide more transparency and consistency in their price setting.

The government in September banned Yulin Coal Trading Centre Corp, an influential firm in the major coal mining region of Shaanxi province, from publishing price assessments and market news.

“We stopped publishing domestic coal prices for several months. It’s hugely sensitive,” said a manager with a commodities price assessment agency in Beijing.

($1 = 0.1566 renminbi)

Commodities

Halliburton says not buying Exxon stake in Iraqi oilfield

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Halliburton says not buying Exxon stake in Iraqi oilfield
© Reuters. FILE PHOTO: A member of security foreign personnel walks with an Exxon’s foreign staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, during the opening ceremony near Basra, Iraq June 17, 2019. REUTERS/Essam Al-Sudani

2/2

By Aref Mohammed

BASRA, Iraq (Reuters) -Halliburton has not proposed buying Exxon Mobil (NYSE:)’s stake in Iraq’s West Qurna 1 oilfield, a spokesperson for the U.S. oil services company said on Wednesday, denying comments from a senior official from Iraq’s Basra Oil Co. (BOC).

“We are not buying an oil field and are not partnering to buy an oil field. We do not typically discuss commercial terms for bids or tenders, but in this case we want to be clear that we are not buying any fields,” said Halliburton (NYSE:) spokesperson Emily Mir.

Hassan Mohammed, deputy BOC manager in charge of oilfields and licensing rounds affairs, earlier told a press conference that Halliburton had submitted a proposal to buy Exxon’s stake in the southern West Qurna 1 field

He added, however, that the Iraqi government’s preferred option was for BOC itself to buy Exxon’s stake in the field.

Iraq said in April that Exxon was seeking to sell its 32.7% stake in West Qurna 1, and that the oil ministry had started discussions over a possible deal.

Separately, Iraq will start work to maintain and upgrade its key undersea oil exports pipelines and its two onshore ports that will help boost export capacity to six million barrels per day (bpd) in 2025 from 3.2 million bpd currently, Ahmed Fadhil, deputy BOC manager in charge of oil exports facilities upgrading operations told Reuters.

Fadhil said bids had been completed to invite foreign services companies to compete to build two undersea 48-inch oil exports pipelines to replace existing outdated lines.

Construction work to build the two lines to ship to the Basra offshore terminal is expected to start in the second quarter of 2022 and the new undersea lines are expected to be operational in mid 2024, said Fadhil.

A third undersea pipeline is under construction currently and is expected to be completed in mid 2023. The three export lines have a combined capacity to export three million bpd.

Iraq has also awarded a deal to a Russian company to assess damages and start repair works on another 42-inch undersea export pipe which transport crude oil to its Khor al-Amaya terminal, one of its two southern offshore oil export terminals, said Fadhil, without naming the company.

Loading operations have been halted at Khor al-Amaya since 2017 when the pipeline suffered ruptures and leakages, and had to be shut.

Maintenance operations are expected to be completed to bring back crude loading operations at Khor al-Amaya by the end of 2022, with initial capacity to pump 400,000 bpd, said Fadhil.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Commodities

U.S. could tweak timing of oil stockpile release if prices fall -official

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U.S. could change timing of oil stockpile release if prices drop -official
© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

By Timothy Gardner

WASHINGTON (Reuters) -The Biden administration could adjust the timing of its planned release of strategic stockpiles if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

Turk, speaking in a video interview for the Reuters Next conference https://reutersevents.com/events/next to be broadcast later on Wednesday, added that other consumer nations that had agreed to release strategic reserves in concert with the United States to tame prices could also adjust their timing if needed.

“I think each country will make decisions based on what’s useful and good for their consumers and based on where the price is,” he said.

The administration of President Joe Biden had announced last month https://www.reuters.com/markets/commodities/us-set-unveil-emergency-oil-release-bid-fight-high-prices-2021-11-23 that it would release 50 million barrels from the U.S. Strategic Petroleum Reserve, alongside smaller releases from China, India, Japan, South Korea and Britain, to help lower consumer energy costs.

The unusual agreement was designed to tame soaring energy prices after the OPEC producer group and its allies rebuffed repeated requests from Washington and other consumer nations to pump more quickly to match rising demand as the world began to exit the pandemic.

Oil prices have since declined, however, amid worries that the new Omicron variant https://www.reuters.com/business/healthcare-pharmaceuticals/omicron-variant-could-outcompete-delta-south-african-disease-expert-says-2021-11-30 of the coronavirus will spread and trigger extensive lockdowns, reducing global energy demand.

“The president gave us flexibility,” Turk said about the U.S. planned release of strategic stockpiles.

“So if the price of oil goes down significantly, if the pain at the pump that is currently being experienced by consumers around our country, and around the world as well, dissipates for whatever reason, then we use the tools differently,” he said.

“The metric of success for any policy from our end related to these issues is what is the price at the pump? … not whether we get 50 million barrels out as quickly as we possibly can,” he said.

Turk added that the White House was still studying proposals from some of Biden’s fellow Democratic lawmakers to ban crude oil exports to keep prices down, saying it remained among the range of tools the administration could eventually use.

“We’ve certainly heard from members of Congress who feel both ways on this issue,” he said. “And so we’re putting together all that analysis, all that information to inform decision making by our secretary and ultimately by the president.”

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Continue Reading

Commodities

U.S. could change timing of oil stockpile release if prices drop -official

Published

on

U.S. could change timing of oil stockpile release if prices drop -official
© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

By Timothy Gardner

WASHINGTON (Reuters) – The Biden administration could adjust the timing of its planned release of strategic stockpiles if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

Turk, speaking in a video interview for the Reuters Next conference https://reutersevents.com/events/next to be broadcast later on Wednesday, added that other consumer nations that had agreed to release strategic reserves in concert with the United States to tame prices could also adjust their timing if needed.

“I think each country will make decisions based on what’s useful and good for their consumers and based on where the price is,” he said.

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Continue Reading

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