The highlights in Asia on S&P Global Platts Market Movers this week with Abache Abreu, Regional Pricing Lead - India:
** New wave of coronavirus infections keep global commodity markets on tenterhooks
** Crude oil producers watch developments in China amid Beijing's plan to clamp down on tax-evading private refineries
** Traders expect US LNG cargo cancellations amid unfavorable economics for deliveries to Asia
Also on this week's episode: strong steel output seen supporting iron ore prices, petrochemical operators face potential expansion delays, and freight rates languish in year-to-date lows.
New wave of coronavirus infections raises concerns on oil demand recovery
This week, a new wave of coronavirus infections is keeping global commodity markets on their toes, US LNG exporters face more cancellations, and steel markets continue to rebound.
But first, crude oil producers are keeping a close eye on China's decision to impose heavy penalties on refiners found guilty of tax evasion.
Independent refiners could see their license to import crude oil suspended, which could pose yet another risk for global oil demand recovery.
This week China is also releasing international trade data for May, and strong recoveries are expected for both gasoil and gasoline demand.
The breakdown of China's imports will likely to affect supply and demand forecasts for the third quarter, already lifted by deep production cuts from OPEC and its allies. But the rebalance of commodity markets is anything but certain, and further economic lockdowns remain significant risks to a full recovery.
Markets for LNG and transportation fuels are on edge after new breakouts emerged in Beijing and India, with analysts saying a pandemic resurgence is almost inevitable.
In the LNG markets, all eyes are on the US, where traders are expecting around 45 cargoes for August loading to be canceled.
Unfavorable economics for deliveries to Asia, where prices remains at record lows of $2/MMBtu, suggest US LNG volumes will remain depressed in the weeks to come.
In the coal markets, low demand from India and China could be cushioned by lower production from Indonesia, while petrochemical operators are looking at project expansion delays as a means to counter demand destruction, with 2 million mt/year of Asia's polyethylene capacity at risk.
Meanwhile, China's steel market remains the standout global performer, supporting iron ore prices above the hundred-dollar mark, and the support looks set to continue on low stocks, strong steel output and weaker exports from Brazil.
Will the iron ore rally hold? Share your thoughts on Twitter with the hashtag PlattsMM.
And in shipping, this week brings little hope for clean tanker owners of any uptick in demand for gasoil and jetfuel, with freight rates at their lowest levels for 2020.
Finally, please check out Platts Live, a virtual alternative to our face-to-face events, featuring content on the coronavirus outbreak, and allowing our customers to continue to engage with us, and each other. You can access it at: spglobal.com/platts-live.
Thanks for kicking off your Monday with us. Have a great week ahead!