Asian commodities are expected to continue feeling the impact of Hurricane Harvey, particularly in the LNG and petrochemicals markets, Bunker Fuel Editor Surabhi Sahu reports in this Platts Market Movers - Asia video.
The LNG prompt market could face increased downward pressure this week as the Sabine Pass LNG facility in the US resumes exports.
In petchems, prices of acrylonitrile are expected to rise as supply tightens in the aftermath of the hurricane while MEGlobal is supplying minimum contract volumes of monoethylene glycol to Asian customers amid shortages.
Meanwhile, Panamax and Supramax segments of the dry bulk market are expected to start the week on a firm note due to a rise in cargo volumes and tight tonnage availability. Rising freight levels has seen time charter equivalents surge over over the past month.
Asian markets are also keeping an eye on data releases - China's crude oil production and throughput, and Singapore's bunker fuel sales.
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Video Transcript
The highlights on Platts Market Movers this week - China to release key oil data, shipping and coal markets seen tight, and Hurricane Harvey continues to impact gas and petrochemical markets.
Starting off with oil, China is due to release crude oil production and throughput data for August on Thursday. Throughput is widely expected to be stable to slightly higher than the level seen in July. Any fall in throughput at independent refineries due to tougher safety and environmental checks is expected to be offset by rises at state-owned ones amid healthy summer demand.
The bunker fuel market will be monitoring Singapore’s marine fuel sales data for August, which is due for release on Wednesday. Singapore's July bunker fuel sales bounced back almost 15 percent from a lull in June, contrary to market expectations, and August data could show this momentum has continued.
In the dry bulk market, both the Panamax and Supramax segments will start the week firm due to a rise in cargo volumes and tight tonnage availability.
The strong flow of thermal coal from Indonesia, nickel ore from the Philippines and iron ore from Iran is supporting Supramax freight levels.
Support in the Panamax segment is coming from met coal flows from east coast Australia, thermal coal from South Africa and grain from the North Pacific. The rise in freight levels has seen time charter equivalents surge over the past month.
So the question this week is, will this trend continue? Tweet us your views with the hashtag #PlattsMM.
In thermal coal, seaborne traders will be checking the status of shipments into south China's Guangzhou port this week amid claims the port is restricting imports for the rest of the year after reaching its import quota limit. Ships have few alternatives in Guangdong province if the reports are true.
In LNG, the JKM assessment for October cargo deliveries is entering its last week before it rolls over to November, and traders will be monitoring how early procurement takes off ahead of winter.
The prompt market could face increased downward pressure this week as the Sabine Pass LNG facility in the US resumes exports after Hurricane Harvey. Australia’s new Wheatstone LNG facility is also expected to export its first cargo in the coming week or two.
In petchems, MEGlobal, a subsidiary of Kuwait's Equate Petrochemical, has begun supplying minimum contract volumes of MEG to Asian customers amid supply shortages caused by strong demand and the impact of Hurricane Harvey.
Acrylonitrile prices hit a near three-year high in Northeast Asia last week amid strong fundamentals, and are expected to rise globally this week as supply tightens in the aftermath of Harvey. US producers Ineos and Ascend Performance Materials have both declared force majeure due to the hurricane.
That’s it for this week! Thanks for kicking off your Monday with us and have a great week ahead!