The OECD’s latest Interim Economic Outlook said that the global economy is turning a corner as growth remained resilient through the first half of 2024 with declining inflation and robust trade growth, although significant risks remain. The OECD expects global growth to remain resilient at 3.2% in both 2024 and 2025.

G20 GDP growth remained relatively stable in 2Q24 with a 0.7% quarter-on-quarter increase according to preliminary estimates. China, India and the US contributed the most, although Brazil and Saudi Arabia saw the highest growth rates (both at 1.4%). The remaining G20 countries experienced weaker growth in 2Q24 than the G20 as a whole.

OECD headline inflation fell to 5.4% in July from 5.6% in June, despite rising in about half of OECD countries. G7 year-on-year headline inflation was stable at 2.7% in July. In the G20, year-on-year inflation fell to 6.7% in July from 7.1% in June.

WTO

China accused Canada of WTO rule violations over its decision to impose 25% tariffs on Chinese steel and aluminium and 100% tariffs on Chinese electric vehicles effective 1 October. China also lodged a request for consultations with Canada at the WTO (see also the report on possible retaliatory action by China on imports of Canadian canola under Canada in the Agribulk section).

The WTO has released its World Trade Report 2024 which advocates and highlights the virtues of international trade. Among its findings, the WTO argues that reducing trade costs is crucial to leverage future opportunities for trade-led growth.

CHINA

In late September, China’s central bank announced a series of measures aimed at boosting the flagging economy to try and hit the country’s 5% growth target. It included interest rate cuts, a cut to the required reserve ratio for banks and support for the property sector. The latter included a cut to existing mortgage rates and a cut to the downpayment ratio on second home purchases. However, the property sector still faces the headwinds of falling home prices, excess housing inventories and low buyer confidence.

New home prices in China fell by 5.3% year-on-year in August, the fastest drop since May 2015, and followed on from a 4.9% decline in July according to National Bureau of Statistics data. On a month-on-month measure, new home prices fell for the fourteenth month in a row, declining 0.7% in August matching the fall in July.

SAUDI ARABIA

An IMF mission to Saudi Arabia noted that the country’s GDP contracted by 0.8% in 2023 reflecting oil production cuts. However, non-oil GDP grew by a robust 3.8% driven by private consumption and non-oil investment. Non-oil growth is projected to reach 4.4% in the medium term after moderating to 3.5% in 2024.

USA

Around 45,000 union workers are threatening to strike from 1 October at 36 US East and Gulf Coast ports that handle approximately half of US seaborne imports. The current six-year contract expires at the end of September and pay talks appear to be in deadlock. A strike would impact import and export trade across the full range of dry bulk commodities, backing up inventories, causing excess delays, creating struggles to find alternative routes (particularly for European and East Coast South American trade partners) and adding to shipping costs.

STEEL

MARKETS

Iron ore futures briefly sank below US$ 90/tonne in early September to their lowest level in almost two years as China’s steel slowdown left the market awash with iron ore. Prices have slumped by about a third this year raising speculation about how low they must go before mine closures bring supply back in line with demand. As we reported last month, BHP estimates that the cutoff CFR price for many high-cost producers is above $90/tonne which means that around 130-140 million tonnes/year could become too expensive to mine with a further 30-40 million tonnes at risk if CFR prices fall towards $80/tonne (this comprises roughly 75% seaborne and 25% domestic Chinese ores).

In mid-September, Goldman Sachs cut its iron ore price forecast for the fourth quarter of 2024 by $15 to $85/tonne because of market oversupply. Late in September, the Chinese central bank unveiled its largest stimulus package since the pandemic. The broader-than-expected package saw iron ore futures push back up, with the Singapore Exchange October price trading back over $100/tonne (it had fallen to below $82/tonne at the start of the last week of September).

OECD

The OECD presented analysis showing that the gap between global steelmaking capacity and global demand for steel is growing rapidly. The gap was estimated at 551 million tonnes in 2023 and is expected to widen to about 630 million tonnes over the period from 2024 to 2026. The OECD coordinated the analysis from three bodies, the Global Forum on Steel Excess Capacity, the OECD Steel Committee and the Climate Club. It was also noted that a significant factor behind the widening gap was the support provided to China’s steelmakers through substantial government subsidies, particularly during periods of profit decline, with state-owned enterprises benefitting the most.

WSA

The latest August 2024 crude steel production data from the World Steel Association had global output across 71 reporting countries at 144.8 million tonnes, down 6.5% year-on-year. Chinese output for the month was estimated at 77.9 million tonnes, a fall of 10.4% year-on-year. Outside China, other major producers that recorded year-on-year losses in August included Russia (-11.5%), Iran (-9.9%), Japan (-3.9%), and South Korea (-2.2%). There were year-on-year gains in Turkey (+13.8%), Brazil (+7.3%), India (+2.6%), the EU (+2.2%), and the US (+0.7%). The WSA estimated Chinese crude steel output in the first eight months of 2024 at 691.4 million tonnes, down 3.3% year-on-year. Over the same period India’s output totalled 98.5 million tonnes, up 6.5% year-on-year, while EU production totalled 87.2 million tonnes, up 1.5% year-on-year.

ALBANIA

Kurum has suspended steel production at its Elbasan steelworks due to financial problems caused by the drop in international steel prices. The plant has a 510,000 tonnes/year electric arc furnace and three rebar mills with a combined capacity of 700,000 tonnes/year. The company is reported to be carrying our repairs and modernisation of equipment.

AUSTRALIA

BlueScope Steel has signed a preliminary agreement with Israel-based Helios Project to trial its green iron production process from 2026. The process uses sodium as a reducing agent and produces no carbon emissions, the only emission being oxygen.

The Department of Industry, Science and Resources has cut its forecast of Australian metallurgical coal exports in the financial year from July 2024 to June 2025 to 161 million tonnes, down 6.4% from its previous forecast made in June.

BRAZIL

ArcelorMittal Brasil announced the suspension of its expansion project at its Joao Monlevade steel plant due to growing competition from China. The plant’s annual steelmaking capacity was due to be increased from 1.2 to 2.2 million tonnes by the second half of 2026.

Brazilian miner Vale said it now expects to produce between 323 and 330 million tonnes of iron ore in 2024, up from its previous forecast of 310 to 320 million tonnes.

CANADA

Local media reports suggested that ArcelorMittal Dofasco is missing key milestones in its $1.8 billion green steel project to decarbonise its Hamilton plant by 2028. This includes demolishing a coke plant to make room for a direct reduced iron plant and the construction of a 14 km natural gas pipeline to power DRI processing ahead of green hydrogen becoming more available and affordable. Dofasco is also planning new electric arc furnaces. The federal government, who along with the Ontario government are due to cover half of the project’s costs, was reported to have said that the company now aims to hit its carbon emissions goals by 2030.

CHINA

China’s crude steel production in August fell 6.1% from July to total 77.92 million tonnes according to official data, the lowest level since December 2023. It was also down 10.4% year-on-year. Total output for the first eight months of this year was 691.41 million tonnes, down 3.3% year-on-year. Chinese steelmakers are also struggling with low domestic steel prices with the price of hot rolled coil hitting its lowest level since 2017 in September.

According to the General Administration of Customs, China imported 101.39 million tonnes of iron ore in August, down 1.38% from July and down 4.73% from a year earlier. August also saw a surge in steel exports reaching 9.5 million tonnes, up 21.3% from July and 14.7% year-on-year, with reports of weak domestic demand and an export sales rush ahead of fears over mounting trade frictions.

EU

According to the European steel association, Eurofer, the European steel industry and manufacturing is at existential risk of de-industrialisation. Eurofer argues that a Clean Energy Deal including swift and radical measures in EU industrial, energy and trade policies, is the last chance to ensure Europe’s prosperity and shield European industry from cheap imports driven by third countries’ unfair trade practices, overcapacity and lower climate ambitions. Immediate action on blocking unfair trade and imposing a waterproof Carbon Border Adjustment Mechanism are considered key requirements by Eurofer.

GERMANY

Thyssenkrupp Steel Europe (TKSE) said a planned directly reduced iron and steel facility to produce carbon-free steel could be more expensive than previously thought. The Duisburg project was earmarked to cost around 3 billion euros and to start operations in 2027. The announcement follows the resignation of TKSE’s leadership at the end of August in a dispute with its parent Thyssenkrupp over how much money the steel business needs to survive on its own. Germany’s Economy Minister responded to the announcement by saying the company must demonstrate its commitment to the project.

INDIA

At its annual general meeting, state-owned NMDC stated that it recorded a record iron ore output of 45 million tonnes in the last fiscal year to the end of March and is planning to produce 50 million tonnes in the current financial year. The company is also investing in capacity expansion and new infrastructure to raise annual capacity from existing mines to 72 million tonnes. In addition, NMDC is developing joint venture mines to add a further 28 million tonnes of iron ore capacity.

Tata Steel has commissioned India’s largest blast furnace at Kalinganagar, Odisha. The Phase II expansion at the site raised capacity from 3 to 8 million tonnes/year and included a new pellet plant, a coke plant and a cold rolling mill.

India’s finance ministry will impose tariffs of between 12% and 30% on some steel products imported from China and Viet Nam in a bid to safeguard and boost its domestic steel industry. Provisional government data showed that India’s finished steel imports from China hit a seven-year high of 3.7 million tonnes during the first five months of the current financial year from April to August. Later in September, the Indian Steel Association warned that a further increase in imports of Chinese steel could arise following the US decision to impose 25% tariffs on Chinese steel imports.

Jindal Steel and Jindal Renewables have announced a MoU on a plan to integrate green hydrogen into its direct reduced iron units in Angul, Odessa. Jindal Renewables is to develop green hydrogen generating capacity of up to 4,500 tonnes/year starting by December 2025, along with 36.000 tonnes/year of oxygen plus 3GW of renewable energy. This is expected to reduce the facility’s dependence on coal-fired energy by 50% over the next 2-3 years.

INDONESIA

The World Bank’s financing arm, the International Finance Corporation, is to provide $60 million to help shift PT Gunung Raja Paksi (GRP), Indonesia’s largest private steelmaker, to lower-carbon steel production. The funds will be used to upgrade GRP’s electric arc furnace and to explore ways to decommission GRP’s newly built and unused blast furnace.

LIBERIA

Last month we reported that Liberia’s Environmental Protection Agency had shut down the iron ore operations of China Union’s Bong Mines in late August for violating several environmental regulations. A week later, the shutdown order had been conditionally lifted after China Union committed to adhering to applicable laws.

MOZAMBIQUE

The Steel Authority of India (SAIL) is planning to more than double the capacity of its coking coal mines in Mozambique to nearly 4.5 million tonnes/year as part of a strategy to ramp up coking coal supplies. Investment of $150-200 million is expected to be spread over three to four years.

NIGERIA

Chart and Capstone Integrated and China’s Sinomach-He signed a MOU on a proposed $1 billion iron ore-to-steel project in Kogi. It includes an integrated iron ore mine and a 1.5 million tonnes/year steel plant.

SPAIN

ArcelorMittal shut down coke production at its Gijon steel plant following an explosion and fire. However, the company said that, while there may be some delays or temporary halts in operations, the plant’s metallurgical production should remain unaffected.

SWEDEN

Stegra (formally known as H2 Green Steel) has secured a €100 million grant from the Swedish Energy Agency towards the development of its green hydrogen-based steel plant at Boden in northern Sweden. This follows on from a €265 million grant from the European Commission approved in June. The Boden plant will comprise 690MW of electrolysis capacity, a direct reduced iron plant, two electric arc furnaces and cold rolling and finishing facilities capable of delivering 5 million tonnes/year of steel by 2030, with initial production set for 2026.

UKRAINE

The head of Association of Enterprises Ukrmetalurgprom said that steel production in Ukraine could fall by more than 50% if Ukrainian control over Pokrovsk is lost in the war with Russia. The country still has the capacity to produce 12 million tonnes of steel per year, but output had fallen to around 6-6.5 million tonnes/year in the first two years of the war. Pokrovsk remains the site of the only mine under Ukrainian control that produces metallurgical-grade coking coal. Its loss could cut Ukrainian steel production to 2-3 million tonnes/year.

UNITED KINGDOM

The closure of the remaining blast furnace at Tata Steel’s Port Talbot works on 30 September ended over 100 years of steelmaking at the site. The incoming Labour government had earlier recommitted to the plan agreed with the previous Conservative administration to provide 500 million pounds in subsidy to support Tata Steel in building a new scrap-based electric arc furnace at Port Talbot which is not expected to become operational until 2028. The business and trade minister said the new deal contains better redundancy terms for about 2,800 direct job losses and a commitment by Tata to consider new investments. The new government also expects to publish a strategy for Britain’s steel sector next Spring, including plans to invest a further 2.5 billion pounds.

The trade body UK Steel has published a report showing that UK steelmakers are paying up to 50% more in electricity costs than competitors in France and Germany, impacting the industry’s competitiveness and future growth.

The previous Conservative government’s 2022 approval of West Cumbria Mining’s plans to mine coking coal has been ruled unlawful by London’s High Court. This would have been the UK’s first new deep coal mine in decades. The High Court ruling followed a Supreme Court ruling earlier this year which said that planning authorities must consider the impact of burning, not just extracting, fossil fuels when deciding whether to approve projects.

USA

The Office of the United States Trade Representative said that the US will go ahead with Section 301 tariffs on a range of commodity imports from China. This includes 25% tariffs on imports of Chinese steel and aluminium.

The Wall Street Journal reported that US Steel would close mills and likely move its headquarters out of Pittsburgh if the $14.9 billion buyout by Nippon Steel collapses, citing an interview with the CEO. Nippon Steel also said that the core senior management and a majority of board members would be US citizens after a takeover to assuage criticisms of the deal by US politicians and the United Steelworkers union.

POWER COAL

AUSTRALIA

Three New South Wales coal mines have been given federal government approval to extend their operations for the next 30 to 40 years despite environmental opposition. They comprise two thermal coal mines, MACH Energy’s Mount Pleasant mine and Whitehaven Coal’s Narrabri underground mine. The other approval went to Ashton Coal’s semi-soft coking coal Ravensworth underground mine.

CHINA

Chinese customs data showed that coal imports totalled 45.84 million tonnes in August, down from July’s seven month high of 46.21 million tonnes, as rising renewable energy appeared to be finally starting to dampen coal import growth. However, coal imports in the first eight months of this year still hit 342 million tonnes, up 11.8% year-on-year.

China’s National Bureau of Statistics reported that domestic coal production totalled 396.55 million tonnes in August, up 1.6% from July and up 2.8% year-on-year. Production from January to August totalled 3.05 billion tonnes, down 0.3% year-on-year reflecting constraints on output earlier in 2024 caused by mine safety inspections.

FRANCE

EDF said that it has scrapped plans to convert its Cordemais power plant from burning coal to using pellets made from discarded wood on economic and technical grounds. However, the company plans to stop producing electricity at the site in 2027.

INDIA

India’s coal production in the first five months of the current financial year from April to August reached 384.1 million tonnes, up 6.4% year-on-year according to the Ministry of Coal.

Coal India is planning to invest $8 billion to build coal-fired power plants close to its coal mines. The state-owned miner has already received approval for 4.7 gigawatts of coal-fired generation to be built over the next six to seven years. A further 2 GW are reported to be under discussion. The new capacity is in addition to the Indian government’s plan announced late last year to add 88 GW of thermal generation capacity through 2032.

India’s coal imports totalled 90.51 million tonnes in the period April to July, a rise of 0.9% year-on-year, according to the Ministry of Coal. During this period, thermal coal imports rose 2% year-on-year.

INDONESIA

The Indonesian Coal Miners Association expects coal imports by China and India to peak in 2025. However, the ICMA also expects coal imports by southeast Asian countries, including Viet Nam and the Philippines, to grow from 140.9 million tonnes in 2023 to 170.9 million tonnes in 2030.

PAKISTAN

The new state-owned 660 MW Unit 1 coal-fired power plant in Jamshoro has completed a successful trial and was set to commence operations in September. It is expected to use 80% imported coal and 20% domestic coal. The plant was funded by the Asian Development Bank.

POLAND

Poland’s largest power utility PGE plans to close its four-remaining coal-fired units at its Rybnik power plant by the end of 2025. The units have a combined capacity of 900 MW. PGE had already phased out four coal units at the plant to be replaced by an 882 MW gas-fired unit set to start up at the end of 2026.

TAIWAN

TCC, formerly known as Taiwan Cement Corporation and one of Taiwan’s major coal importers, announced that it will halt all cooperation with Russia including stopping purchases of Russian coal for its Hoping Power Plant.

UNITED KINGDOM

The last remaining coal-fired power station in the UK, at Ratcliffe-on-Soar, shut down on 30 September. It received its final coal delivery in late June.

ALUMINIUM

IAI

The International Aluminium Institute reported that global primary aluminium production in August rose 1.2% year-on-year to total 6.179 million tonnes, with 59.7% produced in China. However, the total was down a marginal 0.1% from July’s record level. Global production in the first eight months of this year totalled 48.199 million tonnes, up 3.15% year-on-year. The IAI also reported that global alumina production in August totalled 12.512 million tonnes, down 0.03% year-on-year. Global alumina production from January to August 2024 totalled 96.878 million tonnes, up 2.1% year-on-year.

AUSTRALIA

Metro Mining shipped a record 720,000 wet tonnes of bauxite in August from its Bauxite Hills Mine in Queensland. The company is in the process of expanding annual output from 3.5 million tonnes to 6 million tonnes. The mine, situated 95 km north of Weipa, operates only in the dry season from April to December.

Alcoa’s Portland Aluminium Smelter concluded an additional 287 MW hedge agreement on electricity pricing with AGL Energy, following on from an earlier 300 MW hedge agreement signed in August last year. This locks in electricity procurement at competitive prices through to the middle of 2035.

CANADA

Rio Tinto has appointed Hatch to provide engineering, procurement and construction management and services for its AP60 expansion project at its aluminium smelter in Saguenay, Quebec. The $1.4 million project will increase the facility’s annual primary aluminium capacity by approximately 160,000 tonnes to 220,000 tonnes.

CHINA

China’s metallurgical-grade alumina production totalled 7.22 million tonnes in August according to the Shanghai Metals Market. This represented a rise of 0.67% month-on-month and an increase of 2.82% year-on-year.

China’s primary aluminium production in August totalled 3.73 million tonnes according to the National Bureau of Statistics, up 2.5% year-on-year. Production in the first eight months of this year totalled 28.91 million tonnes, up 5.1% from the same period in 2023.

ICELAND

Century Aluminium expects to reduce its 3Q24 production at its Grundartangi aluminium smelter by approximately 2,500 tonnes due to local geothermal energy companies’ issuance of partial power curtailment orders across industrial customers.

INDIA

The Indian government announced that it will relax import restrictions on calcined and raw petroleum coke imports to support the domestic aluminium industry and other sectors.

INDONESIA

PT Borneo Alumina Indonesia’s Mempawah Phase I project in West Kalimantan commenced operations with its first injection of bauxite. The refinery has a production capacity of 1 million tonnes/year. The company is a joint venture between the state-owned miner Aneka Tambang and the state-owned aluminium producer Inalum. These two companies also have plans for a second phase to double the refinery’s capacity and to invest in an aluminium smelter to further process the alumina output.

Malaysia’s Press Metal Aluminium Holdings is forming a joint venture with three Indonesian partners to build and operate a 1.2 million tonnes/year alumina refinery in West Kalimantan in which it will take an 80% stake. The plant will have the ability to double its capacity in a future expansion.

JAMAICA

Century Aluminium announced in mid-September that it has resumed normal operations at its Jamalco Rocky Point port after completing repair work following damage caused by Hurricane Beryl.

NETHERLANDS

Aldel, Netherland’s sole primary aluminium producer, announced that it is to halt remaining production at its Farmsum facility due to high energy costs. The company has the capacity to produce 110,000 tonnes/year of primary aluminium and 50,000 tonnes/year of recycled aluminium.

SAUDI ARABIA

Saudi state-owned mining company Ma’aden and Aluminium Bahrain (Alba) have signed non-binding terms to pursue the potential formation of a joint aluminium business. Ma’aden has agreed to buy shares in Alba in exchange for the entire share capital of two of its subsidiaries, Ma’aden Aluminium and Ma’aden Bauxite and Alumina. Prior to the announcement, Ma’aden agreed with its joint venture partner Alcoa to purchase its stake in the two aluminium businesses for US$ 1.1 billion in cash and stock.

UAE

Ducab Metals Business plans to double its aluminium production capacity from 55,000 tonnes/year to 110,000 tonnes/year.

USA

The US Geological Survey reported that US bauxite imports in 2Q24 fell by 28% year-on-year to 527,000 tonnes while US alumina imports in 2Q24 decreased by a more modest 1% year-on-year to 325,000 tonnes. The falls reflected lower demand for raw materials following a 12% year-on-year drop in primary aluminium production to 167,000 tonnes in the same period.

AGRIBULK

FAO

The FAO’s World Food Price Index declined marginally in August to average 120.7 points. The FAO cereal index in August fell by 0.5% compared to the previous month, driven by lower global wheat export prices with Black Sea supplies competitively priced and higher-than-expected production in Argentina and the US. The All-Rice Price index increased by 0.6% while the FAO Sugar Price Index fell by 4.7% from July following an improved production outlook for sugarcane harvests in India and Thailand. The FAO also trimmed its forecast for global cereal production in 2024 to 2,851 million tonnes, almost on par with 2023.

USDA

The US Department of Agriculture’s September forecast updates contained only minor net adjustments to 2024/25 season export trade forecasts with the biggest swings occurring in wheat estimates. Looking across all the principal commodities (wheat, coarse grains, rice, soyabeans, and soyabean meal), net changes to the 2024/25 season saw an overall export trade increase of 3.13 million tonnes, a rise of 0.41%.

The Australian 2024/25 wheat export forecast was marked up by 2.0 million tonnes on an expected larger crop. Both Ukrainian and Canadian 2024/25 wheat export forecasts were raised by 1.0 million tonnes, the former on an expected larger crop while the latter reflected larger exportable supplies on higher beginning stocks. These increases were partly offset by a 2.5 million tonnes cut in the EU wheat export estimate on a smaller and lower-quality crop. The Russian maize export forecast for 2024/25 was reduced by 0.4 million tonnes while the EU forecast was trimmed by 0.2 million tonnes, both due to expected lower crops. However, this was partly offset by a 0.2 million tonnes upgrade to the Canadian export estimate because of a carryover change. The only significant amendment to 2024/24 soybean export forecasts was a 0.5 million tonne increase in the Paraguayan estimate based on larger exportable supplies. There were no significant changes to the USDA’s 2024/25 export forecasts for rice and soyabean meal.

ARGENTINA

Production of grains and oilseed in Argentina could reach up to 143 million tonnes in the 2024/25 season boosting exports to 101.5 million tonnes. their highest level in four years, according to the Rosario grain exchange. The exchange noted that current soil moisture conditions are adequate but insufficient rain could reduce the harvest to as low 128.8 million tonnes.

Grain ships loading soybean and corn at Argentina’s inland river ports are taking on less cargo due to near record low water levels caused by drought conditions upstream in Brazil. In mid-September the Parana River recorded the second lowest level at this time of the year since 1970. The river transports roughly 80% of Argentina’s grain and oilseed exports. The Chamber of Port and Maritime Activities said ships were being forced to load approximately 15% less cargo than normally expected.

AUSTRALIA

Workers at Wilmar Sugar and Renewables, Australia’s largest sugar producer, voted to accept a pay offer in mid-September, ending a long running industrial dispute that disrupted sugar output. The months of industrial action threatened that a full harvest might not be processed before bad weather later in the year made it impossible to complete bringing in all the sugarcane.

BRAZIL

A drought in Brazil has halted the movement of grains through the Madeira River, a key link to Brazil’s northern grain export ports. Data from crop agency Conab showed that 34% of Brazilian soybean exports and nearly 43% of maize exports were shipped out via the North Arc route in 2023. However, the impact is expected to be limited given that Brazilian farmers have already shipped out most of their grain for this year.

CANADA

Workers at the six main grain terminals in the port of Vancouver went on strike on 24 September after talks between the Grain Workers Union and the Vancouver Terminal Elevators’ Association broke down. However, talks quickly resumed with the intervention of federal mediators and recent reports indicated that a tentative deal may have been reached.

We reported last month that the Canadian government will impose 25% tariffs on Chinese steel and aluminium and 100% tariffs on Chinese electric vehicles effective 1 October. China has since reacted by announcing that it plans to start an anti-dumping investigation into imports of Canadian canola, a move that was deeply concerning according to the Canadian Farm Minister.

Statistics Canada has lowered its 2024 canola crop forecast to 18.34 million tonnes, down 11% from 2023 but still above the five-year average of 18.34 million tonnes. The production downgrade is driven by expected lower yields and harvested area.

INDIA

The recent push by the Indian government to make more maize-based ethanol to blend with gasolene is turning the country from being a net exporter of maize to becoming a potentially permanent net importer. The government has hiked the procurement price of maize-based ethanol to reduce sugar-based production to free more sugar to meet domestic consumer demand. In the first half of 2024, Indian maize imports jumped to 531,703 tonnes, up from just 4,981 tonnes a year earlier. Over the same periods maize exports fell 87% from 1.8 million tonnes to 241,889 tonnes, according to trade ministry data.

The Indian government has removed a floor price for premium basmati rice exports to help farmers boost overseas sales ahead of harvesting the new season crop. The decision was expected to lead to a surge in export orders. The government has also permitted the resumption of exports of non-basmati white rice.

PAKISTAN

The Ministry of Commerce announced that the minimum price for rice exports would be removed with immediate effect, mirroring policy in neighbouring India.

PARAGUAY

The Paraguay River hit a record low in Paraguay’s capital Asuncion in September. The river provides a key route for the country’s grain exports. The depleted water levels were due to a severe drought upriver in Brazil. The Parana River in Argentina, which joins with the Paraguay River, was also nearing year lows running into the key grain port of Rosario. The Paraguayan oilseed and grain crushing chamber CAPPRO said the low river level was hitting shipments, particularly soybeans, generating delays and making travel times longer

RUSSIA

Sowing Russia’s winter crop has been made difficult due to severe drought conditions. The Sovecon consultancy warned that wheat sowing rates has fallen to an 11-year low clouding the outlook for the 2025 harvest.

UKRAINE

Ukraine’s newly appointed agricultural minister said that the country’s 2024 grain harvest may fall to 54.6 million tonnes compared to around 60 million tonnes in 2023, mostly due to unfavourable weather. This year’s harvest total contains an estimated 21.8 million tonnes of wheat and 25.8 million tonnes of maize. Despite smaller crops, the minister expected Ukraine to keep its exports at a high level which could see 16.2 million tonnes of wheat and 21.7 million tonnes of maize shipped out in the 2024/25 season.

Ukraine’s agriculture ministry reported that its farmers had sown 360,300 hectares of winter grains for the 2025 harvest as of 16 September, significantly less than in the previous year. Record high temperatures and a lack of rain have created unfavourable conditions for sowing winter crops.

Ukraine said that a civilian grain ship was attacked and hit by missiles fired by Russia in Black Sea waters close to Romania on 11 September after departing Ukraine with grain destined for Egypt.

USA

Nearly 200 agricultural organisations urged the government on 27 September to address key supply chain issues ahead of the potential strike by port workers along the East and Gulf Coasts (see the report under USA in the Economic News section).

The National Grain and Feed Association said that rail capacity to ship agricultural exports to Mexico was not keeping up with demand with reports of backlogs of loaded trains and railroads stopping issuing new permits because of the congestion. US agricultural exports to Mexico were reported to have increased 27% year-on-year in the first seven months of 2024.

FERTILISER

MARKETS

A Rabobank report suggests that global fertiliser demand will see little growth in 2024 as affordability declines due to ongoing pressure on farmers’ operating margins. Nitrogen demand will likely continue to recover slowly in 2025 and pick up slightly in 2026. Phosphate demand is expected to remain under pressure in 2025 and pick up slightly in 2026. Potash demand, which currently has more favourable prices, is gently recovering this year. The recovery is expected to slow in 2025 but increase again in 2026.

BRAZIL

State-controlled Petrobras is reported to be evaluating an estimated $800 million investment in its UFN-III nitrogen-based fertiliser plant. Work on the plant was halted in 2014 when it was approximately 80% complete. The company is also exploring partnerships to enhance the plant’s viability. Any decision on restarting construction will become clearer when Petrobras releases its spending plan for 2025-29 due in November.

CANADA

Mosaic said that its Esterhazy and Colonsay potash mines in Saskatchewan have had electrical equipment failures which are expected to reduce 3Q24 potash production and shipment volumes by 200,000 – 300,000 tonnes.

EGYPT

EL Delta Company for Fertiliser and Chemical Industries has awarded a contract for the upgrade and expansion of its urea plant in Talkha, Egypt. The plant’s production capacity is to be raised from 1,725 tonnes/day to 2,250 tonnes/day.

QATAR

QatarEnergy announced plans to build a major urea production complex in Mesaieed. It will eventually include three ammonia production lines and four urea trains, with the first train expected to be operational before 2030. This expansion will increase Qatar’s annual urea production capacity from the current 6 million tonnes to 12.4 million tonnes.

UNITED KINGDOM

Loading workers employed by Hargreaves Industrial Services at CF Fertiliser’s Billingham factory called off strike action after an improved pay offer. They were set to strike from 12 to 20 September and from 28 September to 6 October threatening the supply of fertilisers to domestic farmers.

USA

Mosaic said that its phosphate production and shipments in 3Q24 from its Florida operations are likely to be reduced by 80,000 – 110,000 tonnes after being adversely impacted by weather events including Hurricane Francine. We await news as to whether the recent impact of Hurricane Helene has adversely impacted Florida’s phosphate shipments.

Cronus Chemicals has secured a construction and air permit from the Environmental Protection Agency for its new 950,000 short tons/year ammonia production facility in Tuscola, Illinois. The plant is located near to three interstate gas pipelines ensuring ample supply of natural gas.

The US Department of Energy has announced a conditional loan of $1.56 billion to Wabash Valley Resources for the development of a low-emission ammonia production facility in West Terre Haute, Indiana. The plant aims to produce 500,000 tonnes/year of anhydrous ammonia and to sequester 1.6 million tonnes/year of CO2 using carbon capture technology. The WVR project aims to reduce local farmers’ reliance on imports of nitrogen fertilisers.

FOREST PRODUCTS

BRAZIL

The Brazilian government has asked the EU not to implement its deforestation law regulations at the end of this year and for the law to be revised to avoid hurting Brazilian exports. The EU law banning the import of products linked to the destruction of the world’s forests could affect almost one third of Brazil’s exports to the EU across a wide range of products including agricultural commodities as well as wood, wood derivatives and furniture.

The Brazilian government’s committee on foreign trade approved increases in import taxes on a wide range of chemical and fertilizer products after lobbying by domestic producers. For example, the import tax on ammonium nitrate is to be raised from 0% to 15%. The decision is yet to be approved by Mercosur, the regional common trading area that also includes Argentina, Paraguay and Uruguay.

Chilean pulp producer Arauco has approved the construction of the Sucuriu Project pulp mill in Brazil, according to a statement by parent company Copec. $4.6 billion will be invested in the plant which will have an annual production capacity of around 3.5 million tonnes of dry cellulose. The plant is planned to start operations in the fourth quarter of 2027.

CANADA

Canfor announced the closure of its Vanderhoof and Fort St. John sawmills in northern British Colombia by the end of this year, reducing the company’s sawn timber capacity by over 1 million cubic metres/year. The company blamed increasing regulatory complexity, high operating costs, the inability to access economically viable timber and punitive tariff hikes by the US for its decision. As we reported last month, the US nearly doubled duties on Canadian softwood lumber. The federal government has since launched two legal challenges over the US tariff impositions under the Canada-US-Mexico Agreement.

CHINA

China’s log imports in the period January to July 2024 were reported to be 21.85 million cubic metres, down 6.2% year-on-year. However, July’s data showed signs of a recovery with log imports totalling 3.03 million cubic metres, a rise of 1.8% year-on-year.

EU

The European Union informed WTO members in late September that it will not delay enforcement of its deforestation regulations which are set to be implemented from 30 December despite major agriculture-exporting nations’ objections (see report under BRAZIL).

GERMANY

Germany exported 5.5 million cubic metres of softwood timber in the first seven months of 2024, down 370,000 cubic metres compared to the five-year average. The sharpest fall was in shipments to the US. i

JAPAN

Japan imported 2.3 million cubic metres of softwood sawn timber in the seven months of 2024, up 29% year-on-year.

NEW ZEALAND

The New Zealand government, that came into office last October, has announced plans to reform the Resource Management Act seeking to reduce complicated 2023 regulation of the forestry industry and to introduce more flexible rules. The government said these reforms represent a significant change in approach to forestry and resource management and were welcomed by the New Zealand Forest Owners Association.

Winstone Pulp International is to close both its Karioi pulp mill and its Tangiwai sawmill in New Zealand citing unsustainable power prices. The pulp mill can produce around 220.000 tonnes /year while the sawmill produces sawn timber for both the domestic market and exports throughout Asia.

USA

West Fraser announced that it will close indefinitely its sawmill at Lake Butler, Florida reducing its US lumber capacity by approximately 110 million board feet.

Canfor is to reduce production at its southern US operations due to persistently weak lumber markets. This will include cutting shifts and reducing operating hours.

VIET NAM

Viet Nam’s wood and wood products exports this year in the period up to mid-August reached $9.5 billion, up 24% year-on-year, according to the Decorative Hardwoods Association. The US continues to be the largest export market, taking $4.9 billion of such goods over this period, an increase of 26% compared to last year.

CEMENT

AFGHANISTAN

The governments of Azerbaijan and Uzbekistan have reportedly agreed to build a 1 million tonnes/year cement plant in northern Afghanistan.

BRAZIL

Brazilian cement sales increased to 6.2 million tonnes in August, a ten-year high, according to Brazil’s cement association SNIC. The sales total was up 5% month-on-month and up 3.5% year-on-year. Cement consumption in the January-August period rose by 3.3% year-on-year to 42.9 million tonnes.

Companhia Siderurgica Nacional (CSN) was reported planning to invest US$ 530 million to build a cement plant and a limestone plant in Itaperucu, Curitiba, with construction due to start in 2025. The company is currently working to secure environmental licences for the project.

EGYPT

Egypt’s cement consumption is expected to fall to 45 million tonnes in 2024, down from 47 million tonnes in the previous year, according to the Federation of Egyptian Industries.

ETHIOPIA

The Lemi National Cement Factory has begun production at its new 5.5 million tonnes/year cement plant some 150 km north of Addis Ababa. The Chinese-backed project nearly doubles Ethiopia’s cement production capacity.

INDIA

A press report suggested that Indian cement manufacturers plan to invest US$ 14.3 billion over the next four years to increase capacity by 25% to around 160-170 million tonnes/year in response to rising domestic demand and a major infrastructure push by the government. The report also noted that the top three producers - Ultratech, Ambuja and Shree Cement – are expected to contribute over 70% of the total capacity increase.

India’s JK Cement announced that it plans to invest the equivalent of US$ 358 million to raise its cement production capacity by 25% from 24 to 30 million tonnes/year by the end of the 2025/26 financial year.

INDONESIA

Cement sales in Indonesia in August were reported to be 6.117 million tonnes, up a marginal 0.1% year-on-year. The strongest sales growth was reported in Kalimantan where the construction of the country’s new capital, Nusantara, is continuing. Cement sales in the first eight months of 2024 were estimated at 40.8 million tonnes, up 3% from the same period last year.

KUWAIT

Kuwait Portland Cement have installed a second Siwertell ship unloader in Shuaiba Port, Kuwait City, capable of continuously discharging 800 tonnes/hour of cement from ships up to 80,000 dwt.

KYRGYZSTAN

The Kyrgyzstan government has reached an investment agreement with a consortium of Terek Tash LLC and Zenit LLC to build a greenfield 1.5 million tonnes/year cement plant.

MOROCCO

Total cement deliveries expanded 10% year-on-year in August according to Morocco’s cement association APC. Total domestic deliveries in the first eight months of 2024 were up 7.2% year-on-year to total 8.73 million tonnes.

SOUTH KOREA

The South Korean government was reported to have announced plans to import Chinese cement which was said to be about 15% cheaper than domestically produced cement. Preparatory work, including building cement storage facilities, will take about two years. Details on the possible scale of imports remains sketchy.

SPAIN

Spain’s cement consumption in the first eight months of 2024 totalled 9.64 million tonnes, down 1.4% year-on-year, according to the country’s cement association Oficemen.

USA

The US Geological Survey reported that shipments of Portland and blended cement, including imports, fell by 13.2% year-on-year in June to 9.34 million tonnes. Shipments in the first half of 2024 totalled 49.5 million tonnes, down 5.5% year-on-year.

VIET NAM

The Viet Nam Cement Association (VNCA) reported that domestic cement production fell to 92.9 million tonnes in 2023, well short of overall capacity of 122.3 million tonnes/year. The trend has continued this year with cement plants operating at just 70-75% of their design capacity. VNCA also reported that cement sales increased 10% year-on-year in August to 4.92 million tonnes. However, cement sales in the first eight months of 2024 were down 1% year-on-year at 37.32 million tonnes

Thanh Thang Cement Group has launched a fifth production line with a capacity of 2.3 million tonnes/year at its plant in the northern province of Ha Nam.