In this week's Market Movers Asia with Srija Basu Roy:
- Middle East sour crude under pressure
- Sluggish demand for India HRC, rebar
- Asian LNG demand to remain weak
- Asian thermal coal demand seen tepid
- Low coal orders to affect shipping market
This week, the Middle Eastern sour crude complex is set to come under pressure from a series of US and Latin American arbitrage crude cargoes heading to Asia, coupled with sluggish Chinese demand.
Chinese demand is slowing from its earlier highs, with some sources saying that part of the earlier purchases had been earmarked for the country's strategic storage.
In steel, trading activity in the Indian hot-rolled coil market is expected to be subdued due to high stock levels in the market. The Indian rebar market might also see sluggish demand as many construction workers are likely to return to agriculture-related work as the harvest season starts in some parts of the country.
In the Asian thermal coal market, demand is expected to be muted as there is sufficient stock in China and India is likely to favor South African coal if prices continue to fall. On the supply side, Indonesia miners will wait for the approval of their production quotas for 2024 and continue to fulfil domestic market obligations.
Lower orders for coal and high tonnage levels in the Pacific are likely to affect the shipping market and weigh on Asia-Pacific Supramax fundamentals. The indian Ocean market is also likely to remain lukewarm due to slower activity in Southeast Asia and South Africa.
I’m Srija Basu Roy, thank you for kicking off your Monday with S&P Global Commodity Insights.