Mexico’s Antidrug Push Weighs on Iron-Ore Trade With China

October 20, 2014

10/20/14 Wall Street Journal

Carillo is the second mayor from Michoacan to be killed this year

Mexico’s exports of iron ore have plunged following a crackdown this year by authorities on China-bound shipments linked to drug cartels, Mexican officials said, underscoring the outsize role China plays in the global market for the steelmaking material. Mexico will likely export just 2 million metric tons of iron ore this year, said Mario Cantú, Mexico’s coordinator general of minerals, on the sidelines of an industry conference in the northeastern Chinese city of Tianjin. Last year’s exports totaled 10 million tons, 9 million of which were bound for China.

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Mexican Oil Giant Pemex Looks to Reverse Decline

October 20, 2014

10/17/14 Wall Street Journal

energy - oil barrelsWhen Mexico’s energy overhaul was signed into law in August, Emilio Lozoya, the chief executive of Petróleos Mexicanos, set a goal for the state oil giant that until recently would have seemed unrealistic: to regain its position as Latin America’s biggest company. For Pemex, as the company is known, that means leapfrogging Brazilian oil major Petróleo Brasileiro SA, or Petrobras, which holds the top spot in sales and has expansion plans of its own. Petrobras has been the star of the region’s oil sector for over a decade due to its technical expertise, growing oil production and international portfolio. Pemex’s crude production, meanwhile, has fallen for 10 years straight as the company’s shallow-water fields declined and much of its investment budget went toward squeezing more oil from older fields.

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Pacific Rubiales Gains on Pact With for Mexican Ventures

October 20, 2014

10/17/14 Bloomberg

gas pipeline and gaugePacific Rubiales Energy Corp. (PREC) signed an agreement with Petroleos Mexicanos to study oil and natural gas ventures as Mexico opens its energy sector to private investment for the first time in 76 years. The Bogota- and Toronto-listed company entered into a three-year arrangement with state-owned Pemex to analyze potential projects including deep-water and onshore heavy oil ventures, Pacific Rubiales said today in a statement. The shares fell 1.7 percent to 29,200 pesos at the close of trading in Bogota after earlier surging as much as 7.9 percent. “We expect Mexico will be a significant driver of future growth for Pacific Rubiales,” Chief Executive Officer Ronald Pantin said in the statement.

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Atco Seeks Partners for Mexico Projects in Energy Opening

October 16, 2014

10/15/14 Bloomberg

Energy -electricity_transmission_linesAtco Ltd. (ACO/X) is looking for partners in Mexico as it positions itself to tap the $5 billion in pipeline and power projects to be offered as part of the country’s energy industry opening. The Calgary-based company has been in talks with as many as eight prospective partners as state-owned Comision Federal de Electricidad prepares to auction projects through 2015, James Delano, who heads Mexican operations, said in an interview yesterday. “We didn’t come here to work alone,” Delano said at his Mexico City office after Atco agreed to build a $50 million pipeline in its first venture in the country. “It’s important for us to work with someone who knows the country well.”

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Autlan Steel-Alloy Surge Defying Global Mining Slump

October 14, 2014

10/14/14 Bloomberg

MiningLower energy costs and higher prices for its main product are helping Cia. Minera Autlan SAB (AUTLANB) beat mining competitors hobbled by slumping metal prices. Shares in North America’s largest producer of alloys used in steel have advanced 60 percent this year, the most among peers tracked by Bloomberg. The company last week forecast a 250 percent increase in quarterly operating profit and an 80 percent rise in earnings before interest, taxes, depreciation and amortization, suggesting recent gains are set to continue. Autlan is benefiting from a 15 percent increase in the price of silicomanganese and an 11 percent rise in ferromanganese in the third quarter from a year ago, according to Alik Garcia, an analyst at brokerage Intercam in Mexico City. It’s increasing manganese exports while enjoying lower energy costs after acquiring a power plant.

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Oil price fall disrupts Mexico’s hedging and threatens spending

October 14, 2014

10/12/14 Financial Times

energy - oil barrelsFalling crude prices have disrupted Mexico’s annual oil hedging programme – the largest of its kind in commodity markets – and raised fears the government may have to trim spending just as the economy starts to pick up steam. Luis Videgaray, the finance minister, took the extraordinary step this month of confirming that the highly secretive programme had kicked off. His comments came after the Financial Times uncovered terms of Mexico’s hedging contracts from a new derivatives database.

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Growing U.S. Natural Gas Output Spurs Exports to Mexico

October 8, 2014

10/07/14 Bloomberg

gas pipeline and gaugeNatural gas production expanding at the fastest pace in three years will spur exports to Mexico, according to the U.S. Energy Information Administration. Marketed production will increase 5.4 percent this year to average 73.98 billion cubic feet a day, representing the biggest volume and percentage gains since 2011, the EIA said in its Short-Term Energy Outlook released today. The forecast was raised from last month’s projection of 73.93 billion. The boom in shale drilling at deposits from the Marcellus in the East to the Eagle Ford in Texas will expand natural gas output for the 10th straight year in 2015. The surge in supply is boosting demand for the fuel from Mexico, the Energy Department’s statistical arm said.

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