On this week's Platts Market Movers Asia with Associate Editor Suyash Pande: Cold weather in parts of Asia is expected to increase heating demand and consumption of coal and natural gas. (00:10)
Other highlights from Asia's commodity markets:
*Asian thermal coal prices under pressure (00:45)
*Arbitrage window opens up after Chinese methanol prices fall (01:30)
*COP26 talks enter final week (01:47)
*China International Oil & Gas Trade Congress to discuss 2022 energy outlook (02:12)
*Asian corn buyers await Conab and USDA data (03:09)
This Week: Thermal coal prices under pressure, focus on last week of COP26 talks and Asian corn buyers await Conab and USDA data.
But first, cold weather in North Asia is expected to boost heating demand and the consumption of coal and natural gas. As per official weather forecasts, two strong cold waves will hit most of China in the 10 days. Western Japanese regions are also forecast to experience relatively cold weather in the next one month. An early start to winter has sent temperatures plummeting in cities like Beijing and Seoul and started centralized heating ahead of schedule in some cities. The early winter onset comes at a time regional fuel markets remain tight despite a slight recent easing from record high price levels.
Moving to coal,Asian thermal coal prices remain under pressure after China's decision to impose price caps. Trading activity for seaborne coal has been muted leading to a fall in Indonesian coal prices.
Wider worldwide correction in coal prices has also led to demand uncertainty for Australian coal. Market participants expect China's thermal coal prices to further move downwards, weighing on aluminum prices. Aluminum prices have come off from recent highs, but traders expect prices to bottom out as downstream demand picks up.
That brings us to our social media question for the week: Do you believe the global coal price rally has ended? Share your thoughts on Twitter with the hashtag PlattsMM.
In petrochemicals, an arbitrage window appears to have opened after Chinese methanol prices plunged by 100 dollars a metric ton in the second half of October. Chinese methanol re-exports are now offered around 480-490 dollars a metric ton to Southeast Asia and India for December arrival.
Moving to COP26, Asian economies are keeping a close watch on the final week of the climate change talks for a final push towards a solid commitment to limit global warming.
Developing economies in Asia are still looking for two key agreements--a pledge from developed economies to provide $100 billion in climate finance and progress on Article 6 of the Paris Agreement.
Parallel to the COP26 talks, a key event to watch out for is the China International Oil & Gas Trade Congress.
Hosted by the ministry of commerce, the event will be attended by major Chinese national oil companies and international oil majors like BP, Shell, ENI, and Saudi Aramco. The companies are expected to share their oil and gas trade outlook for 2022 amid the pandemic and increasing focus on carbon emissions. S&P Global Platts will also be presenting on trends in global oil and gas markets.
Staying with oil, Asian refiners will be keeping a close eye on the release of new monthly crude official selling prices by major Middle Eastern producers.
Last week, OPEC+ reaffirmed its plan to increase production by a modest 400,000 barrels per day for December, despite pressure from the US and other consuming countries.
Moving to agriculture, Asian corn buyers will keenly await the monthly crop survey reports of Conab and USDA to gauge the demand-supply balance. Favorable rains in Brazil have raised the prospect of higher global stocks this year.
In palm oil, industry observers in Malaysia expect a double-digit dip in exports as major buyers in India and European Union hold back purchases.
Thanks for kicking off your Monday with us. Have a great week ahead!