Abans Group Commodity World Round Up

9 May – 13 May

1 .OPEC Revises Oil Demand Growth Downwards

12 May 2022

World oil demand growth in 2022 is expected to increase by 3.4 mb/d y-o-y, representing a downward revision of 0.3 mb/d from last month’s report, with 1.8 mb/d in the OECD and 1.6 mb/d in the non-OECD. Oil demand growth in 2Q22 is projected to be slower at 2.8 mb/d, compared with 5.2 mb/d in 1Q22. Demand in 2022 is expected to be impacted by ongoing geopolitical developments in Eastern Europe, as well as COVID-19 pandemic restrictions.

Source: Hellenic shipping news

2 .China lifts metals exports as Western supply chains buckle

12 May 2022

China exported 45,260 tonnes of primary aluminum in March, the highest monthly total since April 2010, with almost half of it to the Netherlands. China has become a major supplier of refined lead to the rest of the world, while refined zinc exports in the first three months of 2022 have already eclipsed last year's total.

Source: Reuters

3 .Global diamond trade fractures under the weight of Russia sanctions

13 May 2022

Russia’s invasion of Ukraine is fracturing a billion-dollar diamond trade. The US relies on India for close to half its diamonds. Disruptions could crimp supplies across North America and cost India $2.5 billion this quarter, or nearly 10% of its annual sales. India’s traders are preparing to mark the origin of every stone — re-routing Russian ones to friendlier markets in China, Southeast Asia, or the United Arab Emirates.

Source: Bloomberg

4 .Germany oil and gas imports from Russia surge in value even as volumes dwindle

13 May 2022

Germany cut Russian energy imports by 27.8% in March but yet the value of its oil and gas imports from Russia itself surged by 56.5% to €2.4 billion. Notwithstanding oil and gas, the value of overall German imports from Russia soared by 77.7% to €4.4 billion in March. Germany may look to diversify away from Russian energy to reaffirm the European embargo but there are two big problems.

Source: Forexlive

5. US oil pipeline operators gear up for higher shale output

12 May 2022

The volume of crude oil flowing on pipelines from the top U.S. shale field to export hubs on the U.S. Gulf Coast could surge to pre-pandemic levels by October. The pandemic doused a shale-oil pipeline construction boom that had added 2.5 million barrels per day export capacity from West Texas to hubs on the U.S. Gulf Coast. Oil production in the Permian basin of West Texas and New Mexico is climbing toward a predicted 5.7 million bpd next year. Utilization of pipelines from the Permian to the Gulf Coast is set to rise to the pre-pandemic level of about 77% by October this year, and climb to 80% by the end of the year. It was around 70% in April.

Source: Reuters

6. Europe's gas supply crisis grows after Russia imposes sanctions

12 May 2022

Pressure on Europe to secure alternative gas supplies increased on Thursday as Moscow imposed sanctions on European subsidiaries of state-owned Gazprom a day after Ukraine stopped a major gas transit route. Gas prices surged, with the key European benchmark gaining 12% as buyers were unsettled by the mounting threats to Europe's supply given its high dependence on Russia. Moscow has already cut off supply to Bulgaria and Poland and countries are racing to fill dwindling gas reserves before winter.

Source: Reuters

7 .CME explores nickel contract after LME trade chaos

9 May 2022

CME Group is talking to market participants about the idea of a cash-settled nickel contract for companies to hedge costs of the electric vehicle battery raw material, two sources with knowledge of the matter said. Market participants say a viable alternative trading venue would give disgruntled users the opportunity to move away from the London Metal Exchange (LME) where nickel trading was thrown into chaos early in March.

Source: Reuters

8 .Peru to increase public spending in mining regions to curb social conflicts

10 May 2022

Peru will increase public spending in mining regions in a bid to de-escalate social conflicts that have impacted mining output, Finance Minister Oscar Graham said on Tuesday. Peru is the world’s No. 2 copper producer and mining is a key source of tax revenue.

Source: Reuters