In this week's Market Movers Asia with Shikha Singh:
- China’s steel output likely to fall further
- China to hold key conference
- Asian refiners may prefer US crude on favorable prices
- Rains dampen Malaysia’s palm oil production, stock estimate
- New Zealand carbon prices volatile
- Asian thermal coal demand to be subdued
This week, China is likely to report a further decline in its steel output for November in its monthly production and downstream industries data.
Chinese markets will also keep an eye on the central economic work conference, which is likely to set the tone for the country’s economic goals for 2024.
In oil, some Asian term crude lifters may lower their nominations for January loading in a response to smaller-than-expected price cuts by Saudi Aramco last week.
South Korean, Taiwanese and Japanese refiners indicated that they may prefer to pick up additional US crude cargoes as the recent downtrend in the Brent-Dubai price spread makes North American sweet crudes linked to the European price benchmark more attractive.
Palm oil production and stocks in Malaysia are likely to fall on the month by the end of November due to heavy rains impeding logistics and farm work, a survey by S&P Global Commodity Insights showed.
New Zealand’s last carbon auction of the year failed due to the lack of enough higher bids, which will lead to the expiry of all 15 million units that were not sold in 2023.
New Zealand’s carbon allowance continues to see price volatility after the failure of the auction.
Market sources expect the volatility to subside and the price to eventually start rising by the end of the first quarter of 2024.
In the Asian thermal coal market, demand from India and China is likely to be muted on the back of healthy inventories. Additionally, a fall in crude oil prices is also going to weigh on the appetite for thermal coal.
I’m Shikha Singh, thank you for kicking off your Monday with S&P Global Commodity Insights.