Abans Group Commodity World Round Up

4 April – 8 April

1 .China’s Oil Demand Outlook Worsening as Virus Outbreak Persists

7 April 2022

China’s worsening Covid-19 outbreak and the extended lockdown in Shanghai has oil analysts cutting their demand forecasts further.  The commercial hub’s staggered eight-day lockdown that was supposed to end earlier this week is still going, with record case numbers topping 20,000 on Thursday. Traffic congestion levels at peak hours are 40% lower than a year ago, data from Baidu show, while the movement restrictions and virus testing means truckers can’t get to the docks.

Source: Bloomberg

2. U.S. blacklists Russian shipbuilder and diamond mining company

7 April 2022

The United States blacklisted two Russian state-owned enterprises, United Shipbuilding Corp and the Alrosa diamond mining company, denying them access to the U.S. financial system over Russia's invasion of Ukraine, the Treasury Department said on Thursday.

Source: Reuters

3. OPEC+ crude production falls as sanctions take bite out of Russia: S&P Global survey

7 April 2022

Crude oil production by OPEC and its allies fell in March from February for the first time in more than a year, the latest S&P Global Commodity Insights survey found, contributing to a tightening market thrown in flux by the Russia-Ukraine war. OPEC's 13 members raised output by 60,000 b/d to 28.73 million b/d, but that was more than offset by a 160,000 b/d decline by the bloc's nine allies, who pumped 13.91 million b/d. With the net decline of 100,000 b/d, the widening gap between the OPEC+ production and quotas jumped to a record-high 1.24 million b/d—casting further doubt on the group's ability to meet growing global oil demand, which many analysts expect to return to pre-pandemic levels in 2022.

Source: SP Global

4 .Japan buyers agree to Q2 aluminium premium of $172/T

7 April 2022

The premium for aluminium shipments to Japanese buyers for April to June was set at $172 a tonne, down 2.8% from the previous quarter, as weak demand in Japan and China outweighed concerns of supply disruptions from Russia, five sources said. The figure is lower than the $177 per tonne paid in the January-March quarter and marks a second consecutive quarterly drop. It is also lower than initial offers of $195-$250 made by producers.

Source: Reuters

5 .Russian gas flows to Europe dip in line with customer requests

7 April 2022

Russian gas deliveries to Europe via the Yamal-Europe pipeline reversed direction to flow from Germany to Poland on Thursday morning and supplies via Ukraine also eased, all in line with requests from customers. Gas flows switched to an eastward direction into Poland at the Mallnow metering point on the German-Polish border on Thursday morning after flowing westward overnight, data from pipeline operator Gascade showed. The change is in line with nominations from shippers, with no requests for westward shipments for the rest of the day, the data showed. Russia's Gazprom is continuing to supply gas to Europe via Ukraine in line with requests from European consumers, which dropped to 105.4 million cubic metres (mcm) from 108.4 mcm the previous day, according to news agency Interfax.

Source: Reuters

6 .IEA to release 120 million barrels of oil to ease prices – Bloomberg

6 April 2022

The International Energy Agency (IEA) will release 120 million barrels of oil to ease prices, half of which would come from the United States, while other IEA members would provide the rest, a Bloomberg reporter said on Twitter. The U.S. contribution would be a part of the 180 million barrels that President Joe Biden has already announced, the reporter said, citing unidentified sources.

Source: Bloomberg

7 .Fed Governor Lael Brainard expects methodical rate hikes

5 April 2022

Fed Governor Lael Brainard said she expects methodical rate hikes and rapid reductions to the central bank's balance sheet to bring U.S. monetary policy to a "more neutral position" later this year. Expectations for the Fed to be a bit more aggressive in fighting inflationary pressures are weighing on gold, considering " Brainard generally considered to be one of the more dovish members of the Fed. Wall Street indexes fell after Brainard's comments, which spooked investors who were already on edge over the prospect of fresh sanctions on Russia.

Source:Reuters

8 .Global nickel smelting up in March despite Ukraine, satellite data shows

5 April 2022

Global nickel smelting activity climbed in March, including in major producer Russia despite the Ukraine conflict, data from satellite surveillance of nickel plants showed. Production in Russia has continued unhindered, according to a statement on Tuesday from commodities broker Marex and SAVANT. Russia supplies about 10% of the world's nickel. SAVANT has picked up disruptions at Ukraine's only ferro-nickel producer, Pobuzhskiy, but not at Nornickel's Nadezhda metallurgical plant in Russia, the statement said.

Source: Reuters