On this week's S&P Global Commodity Insights' Market Movers Asia with Adithya Ram: All eyes are on Pakistan this week as it considers buying Russian crude oil (00:16).
Other highlights from Asia's commodity markets:
*Spot LNG purchases are likely to remain low in Asia (01:03)
*Focus is on China's steel data (01:48)
*Southeast Asian countries look for cheaper sources of wheat (02:29)
*Voluntary carbon markets may see price recovery this week (03:14)
This week: Asia's spot LNG purchases are likely to remain low amid high prices, the spotlight is on steel data from China, Southeast Asian countries continue to scout for cheaper wheat and the carbon markets could see prices rebound.
But first, all eyes are on Pakistan this week as it may potentially join a short list of Asian countries that are buying Russian crude oil.
The Pakistani government recently sought feedback from refineries on importing attractively priced Russian crude to soften the blow from a ballooning energy import bill. The Pakistani rupee is trading at record-low levels and the country's dollar reserves are also running dry. Pakistan is looking to maximize domestic refinery runs by processing the cheapest feedstocks available in the international market.
That brings us to our social media question for the week: Will Pakistan start importing Russian crude like neighbors China and India? Share your thoughts on Twitter and LinkedIn.
In LNG, spot LNG purchases are likely to remain low in Asia as prices linger above 40 dollars per MMBtu. National oil and gas companies, and importers, have been forced to call off purchase tenders and reconsider buying strategies for the next quarter. Asian power utilities are still struggling to meet strong summer demand. The situation is likely to challenge power providers with heatwaves eating into fuel inventories more quickly than expected. Restocking also remains difficult.
Asian demand for low-calorific value Indonesian coal, however, is expected to be steady due to strong summer demand, with sporadic purchases from India and China.
In metals, China is set to release key steel trade and production data this week. Markets are keenly awaiting steel exports, imports, and production numbers at a time when the country's steel market continues to face a supply glut. China's steel exports are expected to dip in June, because of weak steel demand at home and abroad, while imports could also decline. China's daily crude steel output is likely to retreat in June after hitting an 11-month high in May. The production decline is expected to remain limited and will likely not ease the supply glut caused by a slowdown in property construction.
In agriculture, Southeast Asian countries, such as Malaysia and Indonesia, continue to look for cheaper sources of wheat. The countries are trying to ensure adequate supplies and keep rising food inflation under check. Both the countries have approached Europe and Russia to source cheaper wheat as Australia faces port capacity issues.
Although the Platts Australian Premium White wheat assessment has declined from record levels over the past few weeks, largely full port capacities in the country have made it difficult for buyers to procure Australian wheat. The situation has forced Malaysia to seek low-cost wheat from Turkey, which imports wheat to meet its own requirements.
And finally, the voluntary carbon markets may see some price recovery this week, particularly in the technology-based avoidance space. This comes after some market participants said that demand was emerging for renewable energy credits following a lack of activity for more than a week. An India-based project developer said they were seeing some demand and the prices are still under negotiation.
Thanks for kicking off your Monday with us. Have a great week ahead.