Qatar Petroleum is due to close a low sulfur condensate tender on February 14 for April to September shipments. This result will be closely watched by the market, as it will help set the tone for the region's ultra-light crude spot differentials in coming months.
In thermal coal, US exports to Asia are starting to gather pace as Australian thermal coal prices remain high. Utah coal was heard being shipped via Mexico to a customer in South Korea.
The upcoming Lunar New Year break has sharply reduced buying interest in China for thermal coal cargoes from Australia and Indonesia.
Panamax and Supramax freight rates are also expected to slide ahead of the festive season in Asia, but could rebound quickly after the holidays amid positive sentiment across the dry bulk commodity sector.
Associate Editor Sue Koh talks about these and other factors that could drive commodity prices in Asia this week.
Join our conversations on Twitter - use #PlattsMM and connect with us.
Video Transcript
This week, a key condensate tender result is due, more US coal shipments are seen heading east, and markets in Asia will wind down ahead of the Lunar New Year holidays.
First, in oil, Qatar Petroleum is due to close a low sulfur condensate tender Wednesday for April to September shipments. This result will be closely watched by the market, as it will help set the tone for the region's ultra-light crude spot differentials in coming months. The company is offering 500,000 barrels of low sulfur condensate per month for lifting from Ras Laffan.
Regional end-users have paid lofty premiums for condensate in the past few trading cycles due to tight supply, and a recent slight rebound in Asian naphtha cracks could support a further price uptrend.
In LNG, downward pressure could emerge this week after prices posted a surprise 2 per cent jump last week amid a cold snap in North Asia. Falling crude futures and European gas prices, as well as the looming end of the winter heating season, could re-inject downward pressure into prices this week.
The market will also keeping a close watch on tenders from India and Indonesia to gauge end winter pricing.
In thermal coal, US exports to Asia are starting to gather pace as Australian thermal coal prices remain high at around 100 dollars per metric ton, on an FOB Newcastle basis for the 6,000 NAR grade. Utah coal of this grade was heard being shipped via Mexico to a customer in South Korea, at around 90 dollars per metric ton.
China's Lunar New Year holiday later this week has sharply reduced buying interest for cargoes from Australia and Indonesia. In addition, China’s move to limit the price of a key thermal coal grade at Qinhuangdao port, the appreciation of the Yuan against the dollar, and jittery global equities are fueling volatility in coal derivative markets.
In shipping, Panamax and Supramax freight rates are expected to slide this week as activity winds down ahead of the Lunar New Year, but then recover quickly after the holidays amid positive sentiment across the dry bulk commodity sector.
In metals, spot alumina prices fell around 5 percent last week to a 6-month low, amid weak demand and rising supply. China has not been buying due to lower domestic prices, the rest of the world is well stocked, and a labor dispute at a Canadian aluminum smelter is adding to global alumina supply.
China is a key importer of alumina, but has reduced imports in recent months on lower domestic prices. Will the Lunar New Year holidays this week weigh down alumina further? What do you think? Join us in our conversations on Twitter with the hashtag PlattsMM.
Thanks for kicking off your Monday with us and have a great week ahead.