Abans Group Commodity World Round Up

7 Feb – 11 Feb

1 .Biggest annual increase in US inflation in 40 years

10 Feb 2022

Thursday’s U.S. data showed that the consumer price index (CPI) grew 7.5% year-on-year, and 0.6% month-on-month, in January. The core CPI grew 0.6% month-on-month and 6% year-on-year. It was the biggest annual increase in inflation in 40 years and accelerated bets that the Fed would hike interest rates by 50 basis points in March 2022. St. Louis Fed President James Bullard said after the data’s release that he wanted to see a full percentage point worth of rate hikes from the Fed over the next three policy meetings. Rate futures indicated a 62% chance that the central bank will hike interest rates by 50 basis points in March 2022 following Bullard's remarks, more than double the 30% chance recorded late on Wednesday.

Source: Reuters

2 .Aluminium prices hit their highest since 2008

8 Feb 2022

Aluminium prices reached their highest since 2008 on Tuesday, buoyed by investor concern over tight supply and falling inventories. Aluminium has shot up by about 14% this year after gaining 42% in 2021 as China, which produces more than half the world's supply, restricted output to reduce pollution. Chinese smelters use huge amounts of electricity generated by coal-fired power plants. Aluminium stocks in LME-registered warehouses have fallen to the lowest level since 2007 at 767,700 tonnes, down from almost 2 million tonnes last March.

Source: Reuters

3 .Iran nuclear talks restart as critical time pressure and distrust builds

10 Feb 2022

Negotiations aimed at reviving the 2015 Iran nuclear deal restarted in Vienna this week, more than ten months after they first began and weighed down by yet more uncertainty and mutual distrust.  And time is of the essence. With each passing week Iran’s nuclear capabilities grow, making a return to a deal less and less likely. US Special Envoy for Iran Rob Malley is in the Austrian capital for indirect talks mediated by European diplomats, since Washington and Tehran aren’t talking directly. The Biden administration believes a deal is in sight – but if nothing is reached within a few weeks, it could be too late.

Source: CNBC

4 .Goldman sees copper price “breakout”, risk of “extreme scarcity episode”

10 Feb 2022

After a 26% rise in 2021, copper prices have struggled for direction this year.  On Thursday, March futures made another attempt to find higher ground, jumping to $4.7085 a pound ($10,380 a tonne), only  to give back those gains by the end of the day. Goldman says the limited seasonal build-up of copper inventories from record low levels – currently at just over 200,000 tonnes scarcely enough to cover three days of global consumption  –  is “entirely insufficient to tackle” its expected deficit of 197,000  tonnes for this year.   

Source: Mining

5 .Global gold ETFs see highest inflows in January since May 2021: WGC

8 Feb 2022

Global gold exchange-traded funds (ETFs) drew net inflows of 46.3 tonnes or worth $2.7 billion in January, led by North American funds partially offsetting the region’s 2021 outflows, according to a report by the World Gold Council (WGC). The inflows were the highest in terms of tonnage since May last year. Globally, inflows were heavily concentrated in the largest North American funds, with a small increase in European fund holdings. Asian outflows were led by Chinese funds as investors reduced gold holdings ahead of the Chinese New Year, paring back significant gains from 2021.

Source: Livemint

6 .OPEC Supply Issues Risk Heightening Oil-Market Volatility

11 Feb 2022

Chronic oil supply issues among a group of major producing nations threaten to increase tightness and volatility in the energy market and push prices higher still, the International Energy Agency said Friday. The cartel’s supply lagged behind its targets by 900,000 barrels a day last month, compared with a shortfall of 790,000 barrels a day in December. Its supply issues have resulted in 300 million barrels of oil effectively lost from the market since the start of 2021, the IEA said.

Global oil supply is expected to rise by 6.3 million barrels a day in 2022 if OPEC+’s pandemic-era supply constraints are fully unwound as planned, the IEA said. Global supply rose by 560,000 barrels a day in January

Source: The Wall street Journal

7 .Geopolitical tensions in Eastern Europe continues

10 Feb 2022

Geopolitical tensions in Eastern Europe also continue as Russia and Ukraine failed to reach any breakthrough in talks with France and Germany. The talks ultimately did not achieve their aim at ending the conflict over Ukraine, with the U.K. adding that the "most dangerous moment" in the tensions appeared imminent. Russia is holding military exercises in Belarus and the Black Sea following the buildup of its forces near the border with Ukraine.

Source: BBC

8. US and Japan reach deal to roll back Trump-era steel tariffs

: 8 Feb 2022

The US has reached an agreement to ease Trump-era tariffs on Japanese steel as President Joe Biden presses to relax trade tensions with American allies. The US will suspend its 25 per cent levy on steel imports of up to 1.25mn tonnes a year beginning April 1, according to the deal with Japan announced on Monday. A 10 per cent tariff on aluminium will remain in place. Donald Trump’s administration imposed tariffs on a range of countries in 2018 on the grounds that cheap foreign metal imports posed a threat to national security.

Source: : Financial Times