In this week's Market Movers: The metals and mining industry converges on Cape Town; and sentiment in the container freight market is contained. George Griffiths, editor, global container freight market, reports from London.
But first, reactions in corporate results statements, due this week, are likely to reflect tensions over Iran and Venezuela, which continue to dominate the oil market.
Meanwhile, We can also expect fresh insights into the market, February 4, as Russia publishes national oil production data.
This week's social media question is: What will be the impact of the Venezuelan crisis on oil prices? Tweet us your thoughts with the hashtag #PlattsMM.
Elsewhere, industry executives will gather for the Indaba conference in Cape Town, with talk expected to focus on whether there is space for more mergers and acquisitions in the gold sector; while another hot topic for debate will be how high iron ore prices might go.
Steel will also be on the minds of European manufacturers as they look to meet their import needs following the EU's formal imposition of import quotas on steel products.
Some of this steel will be coming to Europe in containers. However, carriers are expecting rates to fall on the North Asia to Northwest Europe route over the course of this month.
And finally, Europe could be set for more LNG imports in the coming months as a narrowing of the spread between Asian spot LNG and the key European gas benchmarks makes Europe a more attractive proposal for deliveries.
Join our conversations on Twitter - use #PlattsMM and connect with us.
In this week's highlights: The metals and mining industry converges on Cape Town; and sentiment in the container freight market is contained.
But first, tensions over Iran and Venezuela continue to dominate the oil market. Look for reactions in corporate results statements due this week. BP will report its fourth-quarter results on Tuesday, followed by Norway's Equinor on Wednesday, and France's Total on Thursday.
Their results should reflect relatively high oil prices, of around $69 a barrel for Brent, evident in Shell's results last week. But in a volatile period, the majors face many pressures. These include maintaining high oil and gas production as well as efficient refining operations.
At the same time they are striving to keep up dividend payments and restrain debt. Total, in particular, has raised expectations of production growth.
We can also expect fresh insights into the market this Monday as Russia publishes national oil production data. This will be closely watched because of Moscow's promises to cut output with OPEC. And in that context, Platts will publish its monthly survey of OPEC output later in the week.
That brings us to this week's social media question: What will be the impact of the Venezuelan crisis on oil prices? Tweet us your thoughts with the hashtag #PlattsMM.
Switching our focus from oil to metals now, industry executives will gather at the annual Indaba conference in Cape Town. Talk is expected to focus on whether there is space for more mergers and acquisitions in the gold sector following the recent Barrick-Randgold and Newmont Mining- Goldcorp tie-ups.
Another hot topic will be how high iron ore prices might go – having surged after Brazilian miner Vale's dam collapse last week. Participants will also be looking at whether the dash to provide raw materials for electric vehicles is actually as fast it was expected to be a few months ago.
Way up to the north, metal will also be on the minds of European manufacturers. They will be looking to meet their steel import needs following the EU's formal imposition on February 2nd of import quotas on steel products. The quotas for long products, such as rebar and beams, are expected to fill quickly. Turkey is hungry to sell to the EU, and long-product stocks already at European ports will be imported under the new system.
The quota for Chinese galvanized steel, used in automotive production, may also be rapidly met.
Some of this steel will be coming to Europe in containers. However, carriers are expecting rates to fall on the North Asia to Northwest Europe route over the course of February, as demand that supported the market in the run-up to Chinese New Year on February 5th tails off.
There are blank sailings in place along this route in an effort to curb the downward spiral in rates. Some carriers are eyeing falls of as much as 20% in the S&P Global Platts Container Rate North Asia to North Continent route over the first two weeks of February alone.
Carriers are also trying to keep rates level into February rather than pushing for increases as is usual at the start of most months. However, this appears to be a challenging task, given the weaker demand, coupled with increased vessel capacity.
And finally, Europe could be set for more LNG imports in the coming months as a narrowing of the spread between Asian spot LNG and the key European gas benchmarks makes Europe a more attractive destination for LNG deliveries.
As you can see from our chart, the premium of the North Asian JKM marker to Dutch-TTF pipeline gas for March and summer delivery has more than halved in the last two weeks to just 30 cents per million BTUs due to a mild winter and healthy stocks in Asia.
Such a low spread means spot LNG cargoes from the Atlantic basin have now an even greater price incentive for delivery into Europe rather than Asia.
Thanks for kicking off your Monday with us, and have a great week ahead.