On this week's Platts Market Movers Asia with Senior Analyst Oceana Zhou: Markets will keep an eye on oil and gas trade flows after Russia and China signed new energy deals last week (00:19)
Other highlights from Asia's commodity markets:
*Rising demand for Asian coal is likely to keep thermal coal prices high (01:21)
*Asian refiners are gearing up for higher Middle Eastern crude official selling prices (01:51)
*India's wheat harvest is in the spotlight (02:25)
*Japan prepares to receive world's first liquefied hydrogen cargo (03:24)
This week: Oil prices, racing towards the 100 dollars per barrel mark, are being closely tracked by Asian consumers, Japan is set to receive the world's first liquefied hydrogen cargo and India's weat harvest is in focus as it looks to ramp up exports.
But first, oil and gas markets will closely watch out for the geopolitical fallout of stronger energy ties between Russia and China amid rising tensions in Europe over Ukraine and Beijing's ongoing trade spat with Washington.
Russia and China signed new deals on February 4 in Beijing strengthening oil and gas trade flows between the two countries. It will allow Russia to diversify its revenue streams from Europe. At the same time, China will be able to expand its energy sources beyond the Middle East, US and Australia.
That brings us to our social media question for the week: Do you think the energy deals with China will give Russia greater leverage in Europe? Share your thoughts on Twitter and LinkedIn with the hashtag PlattsMM.
In coal, order backlogs and lack of spot coal availability are likely to keep Indonesian thermal coal prices high. With the looming threat of disruption to Russian thermal coal, European buyers have shown interest in Indonesian and Australian coal. Buying interest for Indonesian coal from China is also expected to resurface after the Lunar New Year holidays.
Moving to oil, crude market participants await the next round of Middle Eastern crude official selling prices to be announced over the coming days, with major Persian Gulf producers expected to raise prices of their sour crude cargoes to load in March.
In addition, crude traders at major Asian refiners said oil prices may be moving towards the 100 dollars per barrel mark as the pace of OPEC+ production hike had fallen far short of expectations.
Turning to agriculture, grains markets are closely following India's wheat harvest estimate for the crop year 2021-22 with the country witnessing a promising wheat export campaign in the current marketing year. The US Department of Agriculture pegged India's wheat exports to reach multiyear highs at 5.25 million metric tons in 2021-22. A recent Platts survey showed India's wheat harvest may increase by 2 million metric tons on the year to reach around 110 million metric tons. But despite the jump, India's export shipments in 2022-23 are expected to decline as supplies of mill-quality wheat from Australia and Argentina have increased.
In energy transition, Japan expects to receive the world's first cargo of liquefied hydrogen at Kobe by mid to late February. The cargo has been successfully loaded into the Suiso Frontier, which set sail from the Australian port of Hastings. The shipment will determine the feasibility of a liquid hydrogen supply chain in the long term. It is a test run for what could become a regular trade flow of low- or zero-carbon hydrogen from Australia to the higher-priced demand center Japan.
Thanks for kicking off your Monday with us. Have a great week ahead!