China is hosting the Belt and Road Forum, which is looking at ways to connect China with Europe, Asia and Africa through infrastructure projects. How will it impact the energy sector? How will the result of Iran's presidential election set the direction of the country’s energy policy? And what will be the impact of the Kansas blizzard on global wheat prices? Pricing analyst Max Gostelow looks at this and other factors that could drive commodity markets this week.
If you’re interested in India’s commodity markets, join our webinar on May 18 to discuss key findings from our Make in India special report. Register for the webinar here.
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Video Transcript
Welcome to Platts Market Movers, your three-minute look at what the week ahead holds for Asia's commodity markets.
This week, an election in Iran, a coal conference in Bali and a blizzard in Kansas are all likely to impact our markets.
But first, in oil, China is due to release April data later today that will provide clues about the country’s production during the peak refinery maintenance season.
Beijing is also hosting the Belt and Road Forum, which is looking at ways to connect China with Europe, Asia and Africa through infrastructure projects, including in the energy sector.
In the Middle East, all eyes are on Iran's presidential election this Friday. The result will set the direction of the country’s energy policy, and also likely determine the US' policy stance towards Iran.
Meanwhile, Singapore is due to release bunker fuel sales data for April. If the data shows a rise in sales, it will confirm Singapore's bunker market is continuing to defy earlier fears that the compulsory use of mass flow meters since January would shift demand to neighboring ports.
The Long Range 2 freight rate for clean product tankers on the key Persian Gulf to Japan route has risen 20 Worldscale points over the past two weeks on tight vessel supply.
The rise has recently slowed and rates are expected to hover around the same level this week.
In LNG this week, all eyes were on the discount between European and North Asian prices, which widened to one dollar last week.
This did not result in cargoes being reloaded from Europe into the higher priced Asian markets, but that could change if the spread continues to widen this week.
Moving on to thermal coal, traders will be watching for hints on the near-term price outlook at the Coaltrans Asia conference in Bali over the next two days. Recent price falls in China’s domestic market could continue in coming weeks and have a bearish impact on seaborne prices of cargoes from Australia and Indonesia.
In aromatics, ExxonMobil appears set to increase its production in Singapore after reaching agreement with Jurong Aromatics to acquire its plant on Jurong Island. The sale is expected to be finalized in the second half of the year.
Meanwhile, the wheat market is closely watching the impact of snow damage on semi-hard wheat crops after a blizzard in the US state of Kansas last week. If premiums for semi-hard wheat do surge, growers in Australia are likely to plant similar grades during their ongoing planting season to take advantage of the higher prices.
So, our big question this week is, what impact will the Kansas blizzard have on global wheat prices?
Join our conversations on Twitter with #PlattsMarketMovers. We’d love to hear your thoughts.
Also, if you’re interested in India’s commodity markets, join our webinar on May 18, where we’ll discuss key findings from our Make in India special report.
Thanks for kicking off your Monday with us and have a great week ahead.