Energy and materials tightness
Posts in the last 48 hours reported refinery shutdowns and Australian mining halts that are limiting diesel and raw materials, and noted China is preparing stockpiles and diversification moves in response. (x.com) (x.com)
Diesel and industrial raw materials are tightening at the same time, after refinery outages cut fuel supply and Australian weather disruptions hit mining exports. (usnews.com) (riotinto.com) In Texas, Valero shut its 380,000-barrel-per-day Port Arthur refinery on March 24 after an explosion and fire at a 47,000-barrel-per-day diesel hydrotreater unit. Reuters reported the blast was heard as far as 11 miles away, and sources said the plant also lost water and steam during firefighting. (usnews.com) Diesel is the fuel that moves freight, farm equipment and mine haul trucks, and U.S. pump prices are already elevated. The Energy Information Administration put the national on-highway diesel average at $5.608 a gallon on April 13, with California at $7.559 and the West Coast average at $6.822. (eia.gov) The Energy Information Administration said on April 7 that U.S. diesel inventories are expected to stay below the 2021-2025 average, while higher refining margins are adding pressure to diesel prices. The same forecast said U.S. average retail diesel would rise above $5.80 a gallon in April. (eia.gov) On the materials side, Tropical Cyclone Narelle shut Rio Tinto’s four Pilbara iron ore port terminals starting March 24. Rio Tinto said shipping resumed in stages from March 28, but Narelle and February’s Cyclone Mitchell together cut expected iron ore shipments by about 8 million tonnes. (riotinto.com) Australia is a major supplier of minerals that feed steel mills, batteries and defense supply chains, and governments are putting more money behind alternate sources. Reuters reported on April 12 that Australia and the United States had committed more than A$5 billion to critical-mineral projects under a bilateral cooperation push. (msn.com) China is responding by building buffers. The National Development and Reform Commission said in March that Beijing would step up efforts to explore, develop and stockpile strategic mineral resources and move faster to build a national reserve system. (scmp.com) That stockpiling push sits alongside a broader effort to reduce exposure to foreign chokepoints in oil, metals and industrial inputs. China’s new five-year plan puts key commodities on the same strategic level as food and energy security, according to the South China Morning Post’s review of the policy language. (scmp.com) The result is a supply chain under strain at two levels at once: the fuel needed to run heavy industry and the ore needed to feed it. Until refinery capacity returns and Australian exports normalize, buyers are likely to keep paying up for diesel and key raw materials. (eia.gov) (riotinto.com)
