A Platts survey pointed to a 500,000 b/d rise in OPEC's crude oil output in the last two months. Will there be fresh cues about new output cut compliance at the World Petroleum Congress this week? Why are Australian thermal coal suppliers holding on to their cargoes? And will China's demand for for iron ore outweigh the pressure from swelling supply? Associate editor Takmila Shahid explores these and other topicsthat may impact Asia’s commodity markets this week.
Also this week, get an insight into our grains assessment methodology when you join our webinar on July 11 at 3 PM SGT.
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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.
In this week's highlights, new compliance measures likely for crude production cuts, key LNG sell tenders from Indonesia and Russia to be awarded for September, and strong steel fundamentals seen set to continue.
We’ll start with oil markets, where participants are monitoring developments at the World Petroleum Congress in Istanbul this week.
They are seeking fresh cues about compliance with production cuts after a Platts survey pointed to a 500,000 b/d rise in OPEC's crude oil output in the last two months. Continued recoveries in Nigeria and Libya pushed the bloc's output to 32.49 million b/d in June.
That was an increase of 220,000 b/d from May and a six-month high, complicating efforts to hasten oil market rebalancing.
Elsewhere, bunker players will be looking to Singapore's marine fuel sales data for June that is due for release by the Maritime and Port Authority on Thursday.
Any increase in Singapore’s bunker sales may suggest the displacement of some demand from Fujairah, where bunker volumes were expected to fall due to the diplomatic spat between Qatar and its Arab neighbors.
In LNG, all eyes will be on the awarding of key sell tenders from Indonesia and Russia for September deliveries this week. Spot liquidity could increase for September with the likely start-up of Australia’s Wheatstone project next month and the return of post-monsoon demand in India.
In coal, market participants are monitoring the impact of China’s import embargo at some of its Tier-2 ports. Australian suppliers are also holding on to their cargoes, as they expect Chinese buyers to return amid weaker-than-usual hydropower, which may boost demand for coal-fired power.
In agriculture, a derivative settling against the Platts Black Sea and APW wheat assessment is underway this week, making it important to understand what goes into forming these prices.
To get an insight into our grains assessment methodology, do join our webinar on Tuesday at 3 pm Singapore time.
In iron ore, market participants are keeping a close eye on buying interest from Chinese steel mills. Strong Chinese steel fundamentals have been providing support to spot iron ore prices recently.
However, iron ore inventories at Chinese ports remain high level. A latest industry report put the total iron ore inventory at approximately 140.7 million tonnes on Friday.
So, our big question this week is, will demand for iron ore outweigh the pressure from swelling supply and help keep seaborne prices above the $60 mark?
Please send us your views on Twitter with #PlattsMarketMovers. Thanks for kicking off your Monday with us and have a great week ahead!