In this week's Market Movers Asia with Ernest Puey:
- Investors await cues from China's industrial production data
- China's crude steel output to decline
- Primary aluminum output likely to edge up
- Surge in demand may sustain in Asian thermal coal market
- El Nino may impact palm oil output in Asia
This week, the release of China's closely watched industrial production data is likely to offer fresh cues on the state of economic recovery in the world's largest crude oil importer.
The revival of China's economy has been a key source of optimism for global crude demand in 2023. But recent economic data out of the country reflects a patchy recovery.
In metals, the industrial production data is expected to show a fall in China's crude steel output, following a forecast of extended declines in its property and new home sales in April, which could impact steel prices.
However, primary aluminum production in China, is set to rise in May as healthy profit margins may incentivize domestic smelters to keep operating.
In Asian thermal coal, the recent revival of demand from China-based buyers is likely to continue as end-users stockpile ahead of summer.
If demand recovers, supply disruptions due to rains in various parts of Indonesia may lead to higher seaborne spot coal prices.
In agriculture, markets are cautious of the possible emergence of the El Nino climate phenomenon, which typically leads to dryness in parts of Asia. Emergence of El Nino may impact palm oil output in Malaysia and Indonesia in the second half of the year.
Market experts also expect the growth in palm oil production to slow down in May as palm trees will be stressed due to heat.
I'm Ernest Puey. Thank you for kicking off your Monday with S&P Global Commodity Insights.