Ver: Market Movers Asia, Nov 22-26: Markets eye release of crude oil reserves; LNG shipping rates soar

This Week: Asia Pacific LNG shipping rates at record highs, oil companies to bring back equity crude barrels, weak auto demand to weigh on Japan's steel output and Australian carbon credit prices peak after COP26 deal.

But first,oil markets will closely watch out for the release of crude oil reserves by China, India and Japan. Oil traders expect China to release crude oil from its state reserves via auctions. But they anticipate low bidding interest from refiners due to slowing domestic demand as pandemic related curbs come into play ahead of the Winter Olympics.

This brings us to our social media question for the week: Do you think release of crude reserves by major economies will lower oil prices in the near term? Share your thoughts on Twitter with the hashtag PlattsMM.

Staying with oil, Asian refiners are planning to bring home most of their equity crude barrels from overseas upstream operations in 2022. Thailand's state-run upstream company PTTEP will provide domestic refineries equity barrels from Oman, Algeria, Australia and the Americas. South Korea's SK Innovation also has similar plans.

The physical Dubai crude market structure strengthened sharply in recent trading cycles. The spread between front-month Platts cash Dubai and same-month Dubai swap averaged around 3.6 dollars per barrel in November.

Moving to metals, Japan will release its crude steel production figures for October. The data is expected to show improved consumption from local manufacturing units, but automotive sector demand is likely to show a decline. Local vehicle makers have cut their 2021 estimates due to a shortage of semiconductor chips and automotive parts.

In aluminum, China's primary aluminum prices are under pressure due to weak demand and accumulating stocks. Market participants said the outlook remains muted. They ruled out an increase in domestic supply in the near-term due to the recent output cuts in some provinces.

China's alumina market is also facing the heat, as domestic primary aluminum prices fell sharply over the past few weeks and the demand from primary aluminum smelters weakened.

In coal, Indonesian thermal coal prices are expected to edge lower despite lingering supply tightness. Australian coal prices are also expected to cool down further amid limited buying interest.

In petrochemicals, the outlook for Asian polyethylene was mixed as lukewarm demand offset higher crude costs. According to market sources, while suppliers are bullish and see prices moving up in line with rising oil costs, the end-users seemed less optimistic. Traders said production cuts are likely if margins don't improve.

In shipping news, Asia Pacific LNG shipping day rates have surged to an all-time high of around three hundred thousand dollars a day for a standard LNG carrier. Ahead of the peak winter season, vessel demand outpaced the tight supply of ships in the region. This pushed day rates to nearly six times that of around fifty thousand dollars a day recorded at the start of November.

In carbon markets, Australia has seen a surge in demand for carbon credits, driving prices to record highs. Prices have risen more than 95% from early July, as the COP26 deal on carbon markets led to bullish sentiments.

And finally, in agriculture, China's soybean demand trend in the coming days will be keenly watched. China has been the leading destination for US soybean exports. But market participants point out that there may be only a limited export opportunity left for the US beans. This is because Brazilian soy harvest could begin as early as late December due to swifter-than-expected planting progress.

Thanks for kicking off your Monday with us. Have a great week ahead!