Commodities Roundup: Fossil fuel consumption; Saudi-UAE oil spat; Auto sales strong in Q2

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Here’s a quick rundown of news and thoughts from particular commodity markets, including the Saudi Arabia-UAE oil output spat, robust US auto sales and much more.

MetalMiner, a sister site of ours, scours the landscape for what matters. This week:

Brexit Britain

MetalMiner’s Stuart Burns checked in on Britain and its trade policy post-Brexit.

“Trade minister Liz Truss accepted its independent, newly established Trade Remedies Authority recommendation to scrap some quotas on imports that had been carried over from the European Union in 2019 prior to Brexit,” he wrote.

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“The rules set quotas on some 19 steels whereby a 25% anti dumping tariff is applied if imports exceed pre set quarterly quotas.”

Fossil fuel consumption down to lowest in nearly 30 years last year

The US’s consumption of fossil fuels fell to its lowest level in nearly 30 years, the Energy Information Administration reported.

US fossil fuel consumption fell by 9% last year.

“Last year marked the largest annual decrease in US fossil fuel consumption in both absolute and percentage terms since at least 1949, the earliest year in our annual data series,” the EIA said. “Economic responses to the COVID-19 pandemic in 2020, including a 15% decrease in energy consumption in the US transportation sector, drove much of the decline. The United States also had relatively warmer weather in 2020, which reduced demand for heating fuels.”

Saudi-Emirati oil output spat

Speaking of fossil fuels, OPEC nations Saudi Arabia and the United Arab Emirates have recently gotten into a public spat over oil output reductions.

“In a relatively rare example of disagreement — or, at least, such public disagreement — usually close allies Saudi Arabia and the United Arab Emirates (UAE) have failed to reach agreement last week on an extension to the oil output cuts scheduled to expire in April 2022,” Burns wrote earlier this week.

“Saudi Arabia and the other 23 members of OPEC+ are in agreement to increase production by a modest 400,000 barrels per day each month from August to December. They would then extend the current baseline cuts from the scheduled end in April 2022 to December 2022.”

US steel capacity utilization rises to 83.0%

The US steel sector’s capacity utilization rate for the week ending July 3 reached 83.0%, the American Iron and Steel Institute reported.

Steel production during the week reached 1,842,000 net tons. The total marked an increase of 0.4% from the previous week and 41.0% year over year.

For the year to date, steel output reached 46,896,000 net tons at a capacity utilization rate of 79.0%.

Auto sales remain strong in June

US automakers reported strong US sales results for June and for the second quarter.

General Motors reported a Q2 jump of 40% year over year. Meanwhile, Ford Motor Co. reported retail sales fell by 32.5% in June.

FCA US, meanwhile, reported a year-over-year jump of 27% in Q2. Honda’s sales surged by 65.7% in Q2.

“June is set to top off a blistering first half of 2021 with multiple year-to-date performance records,” said Thomas King, president of the data and analytics division at J.D. Power. “On a volume basis, June 2021 year-to-date retail sales are trending to just above 7.1 million units, the best first half of any year on record.

Rio Tinto, POSCO reach climate MoU

Lastly, more and more companies are announcing climate commitments, even in high-polluting industries like mining and steelmaking. Some are even announcing collaborations aimed at accelerating their green transitions.

On Thursday, miner Rio Tinto announced it had signed a memorandum of understanding with South Korea’s largest steelmaker, POSCO. Through the collaboration, the parties will work toward a lower-carbon-emission steel value chain.

“The partnership will explore a range of technologies for decarbonisation across the entire steel value chain from iron ore mining to steelmaking, including integrating Rio Tinto’s iron ore processing technology and POSCO’s steelmaking technology,” Rio Tinto said in a release.

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