How will the situation in Syria following the US missile attack last week affect oil supply and prices? And how will the metallurgical coal market move this week after the 32% surge in premium low volatile coal prices on April 5, in the aftermath of Cyclone Debbie? Editor Alexis Gan looks at this and other factors that could drive commodity markets this week.
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Video Transcript
Welcome to Platts Market Movers, your three-minute look at what the week ahead holds for the Asian Commodity Markets.
This week's highlights: The impact of the US air strike in Syria on crude, and force majeures in Australia see met coal buyers scrambling for supply.
But first, in oil, the market is watching developments in the Middle East after the US missile strike on a Syrian airbase last Thursday sent crude futures soaring in Asia.
Analysts said the spike was due to concerns over possible supply disruptions if supporters of the Assad regime retaliate.
OPEC’s monthly report due to release this week will shed further light on supply cut compliance. This comes after a surprise build in US stocks last week, which has clouded optimism over market rebalancing.
In coal, BHP Billiton, the world’s largest coal supplier, declared force majeure on its Queensland met coal supply last Wednesday in the aftermath of Cyclone Debbie.
Other major suppliers, Glencore, Yancoal, Qcoal and Jellinbah followed suit, sending buyers scrambling for supply.
The spot price of premium low volatile coal spiked 32 percent last Wednesday, the biggest single day rise in met coal history.
Thermal coal prices have also jumped 8 percent in the past month and are expected to remain firm.
In steel, the price surge in met coal is likely to be cushioned by high margins in China.
So, our big question this week is, how strongly will other commodities be affected by the surging met coal market?
With strong domestic prices discouraging export, China's March data due for release this week is likely to show a fall in exports from last year. However, it is likely to be higher than February’s three-year low.
Moving to agriculture, Asian feed buyers are continuing to eye the price spread between wheat and corn this week. South Korea, the world’s third-largest corn importer, traded feed wheat at five dollars a ton below feed corn prices last week. The market is expecting US wheat stock data due for release this week to show a rise in stocks, increasing wheat's competitiveness to rival feed grain.
Send us your views on Twitter with #PlattsMarketMovers. Thanks for kicking off your Monday with us and have a great week ahead.