Kuwait expects oil exporters to agree on mechanism to monitor supply

OPEC and allied non-OPEC exporters would review their crude output at a meeting in Algeria next month. (Reuters)
Updated 22 August 2018
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Kuwait expects oil exporters to agree on mechanism to monitor supply

  • OPEC and allied non-OPEC exporters would review their crude output at a meeting in Algeria next month
  • Oil markets should remain stable until the end of the year

KUWAIT: OPEC and other oil exporting producers are expected to agree on a mechanism to monitor their crude production before the end of the year, Kuwaiti Oil Minister Bakhit Al-Rashidi said on Wednesday.

A committee set up by the Organization of the Petroleum Exporting Countries and allied non-OPEC exporters would review their crude output at a meeting in Algeria next month, he told reporters while touring an electricity station.

“The production numbers of OPEC and (countries) outside OPEC will be reviewed at the meeting in Algeria, and before the end of the current year, there will be an agreement on a mechanism to monitor output next year,” he said.

Oil markets should “remain stable” until the end of the year, he added.

The committee that will meet in Algeria on Sept.23, known as the JMCC, is chaired by Saudi Arabia and includes OPEC members Algeria, Kuwait, United Arab Emirates and Venezuela, as well as non-OPEC members Oman and Russia.

Iran asked to attend the meeting to defend its market share which could be impacted by US sanctions due to take effect on its oil industry in November. After months of underproduction aimed at bolstering crude prics, OPEC agreed with Russia and other oil producing allies to raise output from July. Saudi Arabia said the deal allowed countries able to produce more to meet the group’s overall conformity level, meaning some members, such as itself, could make up for shortfalls elsewhere. Iran, which faces US sanctions, disagreed and criticized Saudi plans to boost output above targeted levels.


EU takes aim at Turkish steel sector

Updated 2 min 31 sec ago
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EU takes aim at Turkish steel sector

LONDON: The European Commission’s move to extend its steel import restrictions threatens to force Turkish mills, already buckling under the weight of US tariffs, to cut production further or in some cases close down, sources said.
The Commission said on Wednesday it will extend and beef up its existing “safeguard” steel import caps until July 2021 to counter concerns that European Union markets are being flooded with steel no longer being exported to the US.
For Turkey’s vast steel sector, the fourth largest contributor to the country’s economy, the caps could prove particularly painful as the EU has given it additional “country-specific” quotas.
Under the safeguards, Turkey has a tariff-free quota for rebar, a construction steel that makes up most of its steel exports, of around 300,000 tons for the first nine months of the respective quota periods, down 60 percent from its 2018 exports.
Country-specific restrictions do not apply in the last three months of the quota periods and Turkey could make up some sales then, but its annual export levels will still be sharply lower.
“Our export markets have disappeared, the local market hardly exists, we’ve got lots of capacity and no market,” said a London-based Turkish steel trader.
He added that hopes the US would soon cut its 50 percent tariff on Turkish steel imports were also fading given it is demanding that in return, Ankara hold fire on Kurdish forces in Syria, something Turkish President Tayyip Erdogan cannot do ahead of local elections.

 

 Major Turkish mills such as Cebitas and Ekinciler said they had, before the EU announcement, already slashed output while Koc Metalurji said it had stopped output for about a month.
Erdemir, Turkey’s largest producer, said it was producing as normal.
Investment bank Jefferies estimates EU caps on rebar from all countries combined should reduce its total rebar imports by at least 28 percent a year, adding that producers such as ArcelorMittal and CMC should benefit most from EU caps on long products like rebar.
“(EU) quotas for (Turkish) rebar are extremely low and will be exceeded in the first one or two months. Local demand is also extremely poor,” said Turkish Steel Exporters’ Association (CIB) head Adnan Aslan.
The CIB estimated late last year, before the latest EU move, that Turkey’s steel production, consumption and exports would fall 30 percent this year.
Wednesday’s beefed-up EU safeguards come after the US placed tariffs of 25 percent on
imported steel early last year, while singling out Turkey later in the year with tariffs of 50 percent due to political tensions with
Ankara.
The US had been Turkey’s largest steel export destination in 2017, but the country’s steel flows to the EU ballooned 80 percent last year, according to Jefferies, making the EU Turkey’s the largest steel export destination.
“Traditional export destinations (for Turkish mills) are closing one after the other. Most probably, the (EU) quotas will be filled immediately, so EU producers will have a relatively good year,” the International Rebar Producers and Exports Association said in a note.

FACTOID

The US had been Turkey’s largest steel export destination in 2017, but the country’s steel flows to the EU ballooned 80 percent last year.