Friday, August 30, 2024

Renewables Accounted for 14.6% of Global Energy Consumption in 2023

By Robert Rapier - Aug 26, 2024

Renewable energy's share of global energy consumption reached 14.6% in 2023, driven by record growth in solar and wind power.
China led the world in renewable energy production and capacity additions, particularly in wind and solar.

Despite the rapid growth of renewables, overall energy demand continues to outpace supply, leading to increased fossil fuel consumption.

In June, the Energy Institute released the 2024 Statistical Review of World Energy. The Review provides a comprehensive picture of supply and demand for major energy sources on a country-level basis. Each year, I write a series of articles covering the Review’s findings.

In previous articles, I discussed:

Today I will discuss renewable energy, with a focus on the growth of wind and solar power.

Overview

In 2023, renewable energy sources surged to new heights. Renewables’ share of total primary energy consumption reached 14.6%, 0.4% above the previous year.

Solar and wind power drove global renewable electricity generation to a record-breaking 4,748 TWh, marking a 13% increase from the previous year. This growth accounted for 74% of all net additional electricity generated worldwide.

Solar power led the charge, with 346 GW of new capacity, smashing the 2022 record by 67%. China contributed a quarter of this growth. Europe, too, made significant strides, adding over 56 GW of solar capacity, making up 16% of the global total capacity increase.

Global Renewable Consumption (excluding hydropower). Robert Rapier

Wind power also soared to new heights, with over 115 GW of new capacity installed—another record. China again was at the forefront, responsible for nearly 66% of these additions. China’s total installed wind capacity now rivals that of North America and Europe combined. Offshore wind, a growing frontier in renewable energy, saw Europe holding the highest share at 12%, but China wasn’t far behind, boasting 37 GW compared to Europe’s 32 GW.

Meanwhile, the share of biofuels increased in the global energy mix. Production grew by over 17% from 2022, with the United States and Brazil leading the way. In 2024, bio-gasoline (predominantly ethanol) and biodiesel production reached a near-even split, with the U.S., Brazil, and Europe consuming the lion’s share of these renewable fuels.

The Top Producers

China dominates the world’s renewable energy production. Notably, both China and India — which have seen dramatic fossil fuel consumption growth in recent years — have increased renewable consumption at double-digit rates over the past decade.

Top 10 Renewable Energy Producers in 2023. Robert Rapier

There are a couple of caveats to note about this table. First, it excludes hydropower. The reason is even though hydropower generation contributes around as much as wind and solar, hydropower growth has been relatively stable for years. This table basically shows the growth trajectory of modern renewables like wind and solar power.

Second, the numbers are reported as “Input-equivalent energy”, which is the amount of fuel that would be required by thermal power. This accounts for the lower efficiencies of converting coal, for example, into electricity. In other words, for a given amount of solar power, the table is calculating how much coal or natural gas would be required to produce that much power.

Conclusions

Renewable energy, particularly wind and solar, continue to grow at rapid rates. With record-breaking growth in capacity and generation, these modern renewables continue to supplement traditional energy sources.

China continues to dominate the renewable sector, driving much of the global expansion, while the U.S., Europe, and Brazil also make significant contributions, particularly in biofuels.

As the world strives to reduce carbon emissions and transition to cleaner energy, renewables will play a critical role in shaping a sustainable and resilient energy future. However, to date overall energy demand continues to outpace the growth in renewables, which has meant that fossil fuel consumption has also continued to grow.

By Robert Rapier

How Libya’s Supply Outage Impacts Oil Markets

By Tom Kool - Aug 27, 2024

Several oilfields across Libya have halted production as closures spread, engineers reported on Tuesday, amid a dispute over control of the central bank and oil revenues. Mohammed al-Menfi, head of the Presidency Council in Tripoli, had issued a decision to replace Central Bank head Sadiq al-Kabir and the bank's board, a move rejected by the eastern parliament.

On Monday, authorities in the east, where most of the oilfields are located, threatened to shut them all down, escalating their standoff with the internationally recognized government in Tripoli, which relies heavily on oil revenues. Prime Minister Abdul Hamid Dbeibah of the Government of National Unity, based in Tripoli, condemned the shutdowns, stating that oilfields should not be closed "under flimsy pretexts."

A complete production shutdown

By Tuesday, Libya’s oilfields were in the process of shutting down. Engineers confirmed that oil production at the El Feel oilfield in southwestern Libya had stopped, and production at several other fields in the east and southeast had either halted or been reduced. Local operators indicated to Bloomberg that production would gradually cease nationwide.

Libya’s oil production, which averaged 1.2 million bpd before the closures, has fluctuated in recent months, with major disruptions occurring in August and January due to political unrest. The current shutdown stems from renewed tensions between Libya’s east and west, particularly over the leadership of the Central Bank of Libya, which oversees the country's oil wealth.

Impact on oil markets and shipping

Experts are assessing the impact on global oil markets. Kpler noted the shutdown impacts key ports including Marsa Al Hariga, Zueitina, Marsa Al Brega, Ras Lanuf, and Es Sider. Europe is the leading destination for Libyan barrels, and "increasingly so in recent years" - accounting for 85% of exports this year according to Kpler's Matt Smith. With Libyan crude primarily light sweet, "European refiners will likely turn to the U.S. and West Africa to replace it."

For the shipping industry, the shutdown presents mixed outcomes. In an article from Tradewinds, Fearnley Securities commented, "Although lower volumes generally have a negative impact, reduced Libyan exports have already affected aframaxes. However, the shift to Atlantic barrels could boost tonne-miles, as OPEC+ is unlikely to increase exports in response to this situation." According to leading shipbroking company Pareto, Libya exported some 1.04 million bpd on average over the last 12 months, most of which went to Spain, Italy and France. Pareto notes that replacement barrels may have to be found “further afield’’.

Libya’s long history of supply outages.

At the moment, it’s difficult to say how long the outage will last. The longest shutdown of Libyan oil production occurred from January 2020 to September 2020, and lasted around nine months. This shutdown was triggered by forces loyal to Khalifa Haftar, the leader of the Libyan National Army (LNA) based in Benghazi, who blockaded key oil facilities as part of a broader political and military conflict against the UN-recognized Government of National Accord (GNA) in Tripoli.

During this period, Libya's oil production plummeted from around 1.2 million barrels per day (bpd) to less than 100,000 bpd, severely impacting the country's economy. In 2020, the continued loss of income pushed both sides to the negotiation table. Shorter outages in production have lasted anywhere between a few weeks and a couple of months, the last of which occurred in 2022 when local militias blockaded oilfields, including the largest Sharara oilfield, which led to a one-million barrel per day loss in production.

By Tom Kool for Oilprice.com

Chile Moves To Suspend Solar Subsidies

By Irina Slav - Aug 27, 2024

Chile has seen its solar generation capacity boom in the past few years, set to reach 13.77 GW this year, up by close to 50% over 2023.
Chile is looking to suspend guaranteed minimum price payments to solar developers.
In many places around the world, solar developers continue to depend on the government to provide incentives.

Chile is perhaps better known for its copper, but the country has also recently emerged as a frontrunner in the energy transition with a veritable boom in solar installations. Now, the government is threatening these. It plans to temporarily remove one subsidy mechanism, and solar developers are not happy.

Like in other markets such as Europe and parts of the U.S., solar generators in Chile depend on government guarantees for certain prices, at which utilities must buy their electricity. However, it seems that these guarantees—effectively subsidies—along with other factors have driven the price of electricity for Chileans too high for the current government’s comfort. So, it wants to suspend the guaranteed minimum price payments for three years to continue subsidizing electricity.

The industry, understandably, was less than thrilled. Chile has seen its solar generation capacity boom in the past few years, set to reach 13.77 GW this year, up by close to 50% over 2023. So, once the subsidy suspension plan was first announced earlier this month, three solar developers’ associations “expressed concern” about the government’s intentions, saying that the plan “significantly alters the remuneration scheme of the PMGD by taking away, through an arbitrary mechanism, revenues from projects with investments already made.”

Foreign investors drawn to Chile by its generous payment scheme for solar developers were also critical of the move. “You invest in Chile thinking that this is Latin America’s Switzerland,” David Crouch, managing partner of Aediles Capital, told Bloomberg. “This action sets a dangerous precedent.” Aediles Capital is one of the companies to be affected by the move and an entity set up to manage BlackRock energy assets in Chile.

“The proposed changes would have us immediately default on our covenants to our debt holders,” another solar developer executive said, as quoted by Bloomberg, in comments on the Chilean government’s move.

What these comments suggest is that the solar industry remains highly dependent on government subsidies for its profitability and even for its status as a going concern: Bloomberg noted in a report on the legislative changes that some wind and solar developers have gone into insolvency because of their exposure to the free market and no government subsidy net.

Supporters of the move say that it has oversaturated the market with solar developers and has pushed electricity prices higher—something that has happened in the European Union and the UK, too, as governments slap additional taxes on electricity in order to fund the expansion of wind and solar.

“We have identified a gap between the efficient cost of development and the income that a group of generators is receiving,” Energy Minister Diego Pardow told Bloomberg in response to questions about the planned change. “There is a space to contribute to the expansion of the subsidy.”

The subsidy Pardow refers to is a subsidy on electricity for households in a move that almost any government would take when its voters are faced with rising bills: keep those down. In this case, the move has pitted the government against investors who previously flocked to Chile because of the guaranteed income.

“Artificial intervention in the prices of electricity supply contracts awarded in public tenders has generated uncertainty and distrust among those who finance the development of energy projects in Chile, as it significantly affects the great distinguishing feature that sets Chile apart, legal and regulatory stability,” a coalition of three solar associations said earlier this month.

It is somewhat ironic, however. The developers are complaining because the government wants to take away their subsidies—suggesting subsidies are a negative, but only when given to someone else, in this case, low-income households. When the subsidies guarantee their own income, they are a great positive.

By Irina Slav for Oilprice.com

This New Methane Conversion Innovation Could Be Huge for Shale

By Alex Kimani - Aug 27, 2024

Scientists at Brookhaven National Laboratory developed a highly selective catalyst that converts methane to methanol in a single, low-temperature step, potentially simplifying industrial processes.

This breakthrough could help utilize stranded natural gas reserves, reducing the need to transport hazardous liquified natural gas.

If scalable, the technology could lower methane emissions from the oil and gas sector, contributing to cleaner energy and environmental goals.

The U.S. Department of Energy’s (DOE) Brookhaven National Laboratory and scientists at several collaborating institutions have engineered a highly selective catalyst that can convert methane into methanol in a single, one-step reaction at a temperature lower than required to make tea. This discovery marks a big step forward over more complex traditional conversions that typically require three separate reactions, running at vastly higher temperatures. On an industrial scale, the simplicity of the system could mark a breakthrough in tapping “stranded” natural gas reserves in isolated rural areas, far from chemical refineries and other costly infrastructure, says Brookhaven chemist and study co-author Sanjaya Senanayake. Such local deployments would remove the need to transport high-pressure, flammable liquified natural gas. According to the scientists, such local deployments would remove the need to transport high-pressure, flammable liquified natural gas. Methane is a major component of natural gas and a potent greenhouse gas while methanol is used as an alternative biofuel for internal combustion and other engines. "We could scale up this technology and deploy it locally to produce methanol that can be used for fuel, electricity, and chemical production," Senanayake said.

Brookhaven Science Associates, which manages Brookhaven Lab on behalf of DOE, and the University of Udine have filed a patent cooperation treaty application on the use of the catalyst for one-step methane conversion and are exploring ways to work with entrepreneurial partners to bring the technology to market. This discovery builds on results from previous studies with the new recipe for the catalyst containing an additional ingredient: a thin layer of "interfacial" carbon between the metal and oxide.

"Carbon is often overlooked as a catalyst. But in this study, we did a host of experiments and theoretical work that revealed that a fine layer of carbon between palladium and cerium oxide really drove the chemistry. It was pretty much the secret sauce. It helps the active metal, palladium, convert methane to methanol," said chemical engineer Juan Jimenez, a Goldhaber postdoctoral fellow in Brookhaven Lab's Chemistry Division and the lead author of the paper published in the Journal of the American Chemical Society.

Also known as wood alcohol, methanol (CH3OH) is considered an alternative fuel under the Energy Policy Act of 1992 with chemical and physical fuel properties similar to ethanol. Methanol was used in the 1990s as an alternative fuel for compatible vehicles; however, current research mainly focuses on its potential use as a sustainable marine fuel.

Lowering Methane Emissions

It’s too early to determine the scalability and economic viability of the one-step catalytic conversion technology. However, if successful, it could prove useful in helping the U.S. shale patch clean up its act by cutting methane emissions.

The U.S. Oil & Gas sector is producing 8x above the volume of methane many operators have pledged to achieve by 2030 to reach their climate goals, a fresh study by non-profit Environmental Defense Fund recently revealed. The environmental advocacy group conducted ~30 flights between June and October 2023, covering oil and gas basins that account for nearly three-quarters of onshore production. The data collected showed that, on average, around 1.6% of gross gas production is released as methane into the atmosphere, about eight times higher than pledged by producers under the Oil and Gas Climate Initiative and the Oil & Gas Decarbonization Charter.

Over the past couple of decades, methane concentrations in the atmosphere have increased sharply, from 1,700 parts per billion (ppb) in 1990 to 1,930 ppb currently. Although methane is much less plentiful in the atmosphere compared to CO2, it’s still able to do plenty of damage at even lower concentrations thanks to being more than 80x more powerful at warming the earth than CO2 over 20 years and 28x more powerful on a 100-year timescale. The fossil fuel sector has been a major contributor to the rapid buildup of methane in the atmosphere, with emissions from venting, leakage, and flaring in the oil and gas sector currently estimated to be responsible for ~25% of global anthropogenic methane emissions. A single gas leak can be quite devastating: Last year, environmental intelligence firm Kayrros SAS deployed National Oceanic and Atmospheric Administration's Geostationary Operational Environmental Satellites (GOES) to quantify a gas pipeline by the Williams Companies Inc. (NYSE:WMB) spewed about 840 metric tons of methane into the atmosphere after a farmer in Idaho accidentally ruptured it while using an excavator. Currently used for weather forecasts, scientists recently discovered that GOES is effective at detecting large methane emissions of around tens of metric tons an hour or larger.

Last year, the U.S. pipeline regulator unveiled new rules aimed at lowering methane leaks from the vast network of 2.7 million miles of natural gas pipelines in the country. The proposal could "significantly improve the detection and repair of leaks from gas pipelines... deploy pipeline workers across the country to keep more product in the pipe, and prevent dangerous accidents," the Transportation Department's Pipeline and Hazardous Materials Safety Administration said.

By Alex Kimani for Oilprice.com

EPA Extends Emergency Waiver for Midwest Gasoline Supply

By Charles Kennedy - Aug 30, 2024

The U.S. Environmental Protection Agency (EPA) has renewed for a second time an emergency waiver for the summer spec gasoline requirements in four Midwest states following the supply emergency after the shutdown of ExxonMobil’s Joliet refinery in Illinois in July and early August.

The waiver for Illinois, Indiana, Michigan, and Wisconsin lifts the federal anti-smog rules that require more expensive summer gasoline to be sold in the U.S. during the hottest months of the year.

The waiver, first issued on July 31 after ExxonMobil’s Joliet refinery was closed on July 15, is now extended for a second time until September 15.

Exxon’s Joliet refinery 40 miles southwest of Chicago is equipped to handle 275,000 barrels of crude per day, producing about 11 million gallons of gasoline and diesel fuel every day.

The facility was shut down in the middle of July following a power outage caused by a storm.

Following a three-week outage, Exxon began to restart on August 7 some units at the refinery.

As a result of the outage, and other outages in the Midwest, regional gasoline prices rose earlier in August, the U.S. Energy Information Administration (EIA) said last week.

A series of refinery outages in Chicago and Ohio raised Midwest prices for petroleum products, particularly gasoline, compared to the U.S. average, the EIA said.

While retail gasoline prices in the Midwest are typically lower than the U.S. average, due to production from local refineries and lower regional fuel taxes, the average retail gasoline price in the Midwest has been within 1% of the U.S. average for three consecutive weeks following the outages, the EIA noted.

Apart from Exxon’s Joliet refinery, operators also reported temporary unit shutdowns at facilities in Ohio, including Cenovus’s 183,000-bpd Lima and 150,800-bpd Toledo refineries.

Midwest refinery utilization decreased 11 percentage points to 86% because of these outages, reducing refinery production of gasoline, diesel, and other refined petroleum products.

After these refineries resumed operations in the second week of August, Midwest refinery utilization increased more than 10 percentage points the following week, to 97% as of August 16.

By Charles Kennedy for Oilprice.com

CAPITAL STRIKE

Equinor Warns Windfall Tax May Discourage Its UK Investments

By Charles Kennedy - Aug 28, 2024

Equinor is uncertain about future investments in the UK North Sea due to the Labour government's proposed tax changes.
The increased windfall tax and removal of tax relief could make investments less economically viable for Equinor.
The company is considering the impact of these changes on its Rosebank oilfield project and may adjust its investment plans accordingly.

Equinor awaits clarity on the UK tax regime by the Labour government before strategizing and committing to investments in the UK North Sea, a senior executive at the Norwegian company told Reuters on Wednesday.

The Labour Party has pledged to further raise the already high windfall tax on oil and gas profits in the North Sea and scrap tax relief for operators for part of the investments in oil and gas assets they have made.

“We need to look at our appetite to invest further in the UK based on the fiscal regime ... it could be that the economics are really, really hard impacted,” Philippe Francois Mathieu, Executive Vice President, Exploration & Production International at Equinor, told Reuters on the sidelines of an industry conference in Stavanger, Norway.

Last month, the Labour government said that it intends to raise the rate of the Energy Profits Levy (EPL) to 38% from 1 November 2024, from 35% now, bringing the headline rate of tax on upstream oil and gas activities to 78%, up from 75% currently. The levy will be further extended by a year to

31 March 2030, while the EPL’s investment allowance will be removed.

The plans have led to a backlash from North Sea oil and gas producers who have signaled that the uncertainty in the tax regime in the UK will further drive investments away and undermine investments in low-carbon technology and solutions, too.

Producers have already warned they are considering moving to more fiscally stable jurisdictions such as Norway.

Norway’s Equinor operates the Mariner field offshore the UK and decided last year to invest $3.9 billion (£3 billion) in the first phase of development of the Rosebank oilfield, one of the biggest offshore oil and gas projects in the region in years.

If the UK fiscal regime changes again with higher taxes, Equinor will “need to look into what we want to do further with the Rosebank project,” Mathieu told Reuters.

By Charles Kennedy for Oilprice.com

Small Tax on Super-Rich Could Yield Billions for Caucasus, Central Asia

By Eurasianet - Aug 28, 2024,

A proposed wealth tax on the top 0.5% of earners globally could raise over $2 trillion, with significant implications for Caucasus and Central Asia.
The tax revenue could be used to address pressing social and economic challenges, particularly those related to climate change.
Wealthier nations like Kazakhstan could generate billions in additional revenue, while even the poorest countries stand to gain millions.

A recent study published by an advocacy group finds that imposing a modest tax on top earners can generate hundreds of millions of dollars in much needed revenue for countries in the Caucasus and Central Asia. The added revenue could go a long way in addressing social and economic challenges connected with global warming and climate change, the study adds.

The working paper, titled Taxing extreme wealth: What countries around the world could gain from progressive wealth taxes, contends that a comparatively small tax paid by the top 0.5 percent of income earners in every country around the globe could collectively raise more than $2 trillion. The paper, published by the UK-based Tax Justice Network (TJN), uses the example of Spain’s wealth tax as the basis for its global model of super-rich taxation.

“Global challenges, in particular the climate crisis, inequality, and the cost-of-living crisis come along with substantial financial needs,” the report states. “A moderate, progressive wealth tax could help countries to raise these urgently needed funds. The proposed tax would seek a reasonable contribution from the top 0.5 percent wealthiest individuals in each country, who, on average, possess more than 25 per cent of a society’s total wealth.”

Under the TJN plan, the super-rich in every nation would pay taxes on assets above a pre-determined threshold, calculated on a sliding scale ranging from 1.7 percent to 3.5 percent. The plan sets a high net-worth threshold to ensure that the middle class is not punished by the tax.

According to the working paper’s estimates, wealthier states of the Caucasus and Central Asia could raise hundreds of millions of dollars in added revenue. In Kazakhstan, the richest state in the two regions, over 61,000 citizens would be eligible to pay the wealth tax. The minimum asset threshold for those facing the tax in Kazakhstan would be $819,381. TJN’s estimate, adjusted for existing taxes and other factors, indicates that its proposed wealth tax could generate an additional $3.7 billion in revenue for the Kazakh government. Those funds could have come in handy to speed recovery efforts for areas of Kazakhstan that were devastated by flooding this spring. Residents of at least one hard-hit area staged protests in May over what they contended was inadequate government assistance.

Elsewhere, the introduction of the TJN plan could generate roughly $695 million in added revenue for the Uzbek government, which has been running up big deficits of late as it strives to retool the country’s economy. Under the TJN formula, the Caucasus’ richest state, Azerbaijan, could add more than $241 million to its state coffers. The poorest nation in the two regions, Tajikistan, could generate about $54 million.

The working paper makes an argument that the super-rich should feel a moral obligation to help defray the consequences of global warming. “The wealthiest citizens bear more responsibility for carbon emissions, both due to their more excessive consumption, as well as to their investment habits,” the report states.

TJN does not outline an action plan to secure international adoption of its super-rich taxation proposal. For the proposal to work, the introduction of stringent international transparency rules would be needed, the report acknowledges, urging the creation of a Global Assets Registry. The chances that any such mechanism will come into being in the foreseeable future seem slim to none.

“Existing tax systems offer opportunities for the super-rich to engage in international tax abuse, primarily through the use of secrecy jurisdictions to shield their fortunes,” the report states. “Therefore, the implementation of a moderate, progressive wealth tax must be accompanied by a move towards full beneficial ownership transparency for all types of companies and assets.”

By Eurasianet.org

Liberty Steel's Polish Plant Faces Bankruptcy

By Metal Miner - Aug 29, 2024

Liberty Steel's Polish plate producer, Huta Cz?stochowa, was recently declared bankrupt for the second time in its history.
Ukrainian metals and mining group Metinvest and Polish coal producer W?glokoks have expressed interest in leasing the plant.
Liberty Steel is appealing the bankruptcy ruling, citing procedural issues and ongoing restructuring efforts.

Big changes seem on the way for the Polish steel industry. Recently, local steel news outlets reported that several companies have expressed interest in leasing Polish plate producer Huta Cz?stochowa, which Liberty Steel acquired in 2021, after a local court declared the plant bankrupt in July.

Among the potential suitors for the plant is the Ukrainian metals and mining group Metinvest. “We can confirm that we were invited to consider leasing the steel plant, with the possibility of later acquiring it,” daily newspaper ?ycie Cz?stochowy quoted Metinvest’s chief commercial officer Dmitriy Nikolayenko as saying on August 15. “At present, we don’t have information on what condition the previous owner left the site in. We need to conduct a thorough assessment, including a comprehensive due diligence study, which would determine the launch date of the steelworks,” Nikolayenko added.

Metinvest officials were not available for comment, despite several attempts. Other parties interested in leasing Huta Cz?stochowa include Katowice-headquartered coal producer W?glokoks, which has stakes in other Polish rolling assets. One official at that company would only tell MetalMiner that the company is analyzing the possibility and declined o comment further.

Metinvest Could Expand Non-Ukraine Capacity

Information on the group’s website showed that Metinvest’s assets outside of Ukraine include Italian plate producers Ferriera Valsider and Metinvest Trametal. The latter is in the Friuli Venezia Giulia region and has a 600,000 metric tons per year capacity to roll plate in 4-180mm and a maximum width of 3200 mm.

Ferriera Valsider, in the Veneto region, can roll up to 400,000 metric tons per year of heavy plate in 8-200mm gauges and widths of up to 3,000 mm as well as 600,000 metric tons of HRC in 1.8-25mm gauges per year to a maximum width 1,555mm.

Huta Cz?stochowa is 80 kilometers north of Katowice, the Silesian Voivodeship’s capital, and can produce about 1.2 million metric tons per year of plate in 5-20 mm gauges on two rolling mills. Information on Liberty Steel’s website indicated that products from the plant target wind towers and unpressurized tanks.

Yellow goods, construction, as well as vehicular and water transport sectors are also targets for Huta Cz?stochowa’s production. In addition, the plant can produce welded pipes in 1,000-3,000mm diameters.

The Plant Has a Checkered Financial History

The Cz?stochowa District Court placed Huta Cz?stochowa into bankruptcy on July 25. Reports from Polish media and steel news outlets stated that this was because the plant had not operated in six months and had not received any new orders. A source with GFG Alliance told MetalMiner that the plant was working at minimal levels earlier in the year, but worsening market conditions in Europe created cash flow problems.

Plate produced in northern Europe is currently about €605 ($675) per metric ton EXW, down from €700 ($780) earlier in the month. This is due partly to lower seasonal demand in the European summer as well as declining input prices.

The current bankruptcy is not Huta Cz?stochowa’s first. Indeed, the same court that announced the current bankruptcy also placed the plant into bankruptcy in September 2019 after its board filed for bankruptcy in June.

Liberty Hopes to Retain its Steel Industry Positions

Sunningwell International Polska reportedly expressed interest in taking over the plant’s lease in 2019, after Polish courts previously placed the plant into bankruptcy. The company withdrew from the planned sale in 2020, after which Liberty Steel acquired it for the reported sum of z?. 190 million ($43.3 million).

Liberty Steel originally took over the lease for Cz?stochowa in December of that year and then fully acquired the plant in May 2021. Liberty’s parent company, GFG Alliance, stated on August 15 that it had filed an appeal against the bankruptcy proceeding.

“Liberty is appealing because it believes the business proved it had strong support from its largest creditor, had a Letter of Intent from a credible financial institution for a €100 million [$111 million] working capital loan, and was already undergoing a restructuring and restart process,” the company stated in an announcement.

“Liberty’s appeal also highlights a number of court procedural issues which have a significant impact on the validity of the proceedings,” the company stated.

By Christopher Rivituso

LA REVUE GAUCHE - Left Comment