In this week's Market Movers Asia with Sarah Mishra:
- OPEC seminar in Vienna
- Thermal coal pins hope on China demand
- New Zealand carbon market faces uncertainty
This week, oil buyers await the OPEC seminar in Vienna as Saudi Arabia initiates the scheduled 1 million b/d cut in production. The cut could further pressure supply amid concerns over future volumes from Russia after an attempted coup in the country.
Over in metals, the domestic China alumina spot market remains under pressure even as recovering demand from Yunnan smelters is easing oversupply to some extent. Alumina refineries have been facing losses over the past few months, but the restart of Yunnan smelters and talks of bauxite mines shutting down in Henan province lent some support to SHFE alumina futures contracts.
The Asian thermal coal market will be looking for signs of demand from China as inquiries for seaborne coal from other Asian regions have been scarce. The continued low prices due to poor demand also triggered output cuts in some mines in Indonesia.
Biofuels markets will focus on Indonesia after it announced that it will enforce its 35% biodiesel mandate from August 1. Stricter implementation of the mandate could dent global vegetable oil supplies as more of the country’s palm oil will be diverted to make biodiesel instead of cooking oil.
In energy transition, New Zealand’s carbon prices are in focus after they tanked to a two-year low amid uncertainty around the emissions trading policy. Sources also said the country will likely miss its climate targets if it fails to adopt more stringent ETS settings and leaves the agricultural sector out.
I’m Sarah Mishra, thank you for kicking off your Monday with S&P Global Commodity Insights!