Al-Tuwairqi and POSCO to exit from Pakistan

Well - here is a shocking news report.

It would seem that Al-Tuwairqi of Saudi Arabia and POSCO of South Korea, who together invested in the TSML DRI plant in Pakistan, have been unable to secure the low-cost natural gas needed to operate the new DRI facility. Requests to the government of Pakistan to consider TSML’s position have seemingly been ignored; with the result that the DRI plant has not operated since Septem­ber 2013.

In a board meeting held on 27^th January 2015 in Dam­­mam, Al-Tuwairqi and POSCO thus decided to permanently close the facility and to exit Pakistan. The investment in the DRI facility was around $340 million. TSML on completion of its integration with steel production was envisioned to be the largest fully integrated steel complex in Pakistan with a capacity of ~1.5 million tonnes per annum. TSML’s exit from Pakistan will therefore be a real blow to the industry.

For this and similar news, check out our steel industry newsfeed at http://www.steelonthenet.com/news.php

Andrzej M Kotas

Chief Executive

www.steelonthenet.com

US spot prices for natural gas

Gas consumers in the USA will be watching US spot prices for natural gas with interest. These gas prices have been dropping month by month, with each of the last six monthly price movements being downwards.

As a result, the natural gas spot price (in US $ per million metric British Thermal Units) at the Henry Hub terminal in Louisiana has now fallen from $.5.97 in February 2014 to just $3.88 in August 2014.

Can the downward price trend continue much longer?

For monthly US gas prices, visit http://www.steelonthenet.com/files/natural-gas-prices-USA.html

blogger@steelonthenet.com

Gas price movements - Europe and the USA

US natural gas prices have behaved very differently from European and other gas prices during 2011. US prices [Henry Hub spot prices, Louisiana, fell significantly over this period, from $162 to $114 / 1000m3, whilst European prices [Russian gas, delivered to German border] rose markedly, from $331 to $436 / 1000 m3. For actual prices, see http://www.steelonthenet.com/commodity_prices.html for prices in Europe and http://www.steelonthenet.com/files/natural_gas_prices_USA.html for prices in the United States.

The difference in price behaviour seems to be explained by the shale drilling boom in the United States - which may soon swell the nation’s underground storage network - and which is resulting in excess gas supply.

Nonetheless, with a difference in prices that is now close to four-fold, it seems clear that regional supply and demand has a major influence on the pricing of this particular commodity.