Abans Group Commodity World Round Up

11th Jan – 15th Jan

1.US President elect, Joe Biden, unveiled his “American Rescue Plan”

Jan 14, 2021

US President elect, Joe Biden, unveiled his “American Rescue Plan”, which includes a wave of new spending, more direct payments to households, an expansion of jobless benefits, and an enlargement of vaccinations, and virus-testing programs. Unveiling the USD 1.9 trillion plans to revive the country's economy and combat the coronavirus, US President-elect, Joe Biden, has said that he knows it “does not come cheaply" but "America can’t afford to fail to pass the plan."

Source: Reuters

2.Federal Reserve Chairman Jerome Powell's commitment to keep monetary policy dovish

Jan 14, 2021

Federal Reserve Chairman, Jerome Powell, has said during a virtual symposium at Princeton University that the Fed will raise interest rates “no time soon”, unless there are troubling signs of inflation. He added that policy makers would “let the world know” well in advance of any decision to taper bond purchases, with the comments further steepening the yield curve, and seeing a rise in breakeven rates.

Source: Bloomberg

3.IMF urges countries to continue strong fiscal, and monetary support

Jan 15, 2021

The International Monetary Fund (IMF) is urging countries to continue strong fiscal and monetary efforts to support their economies, given the continued uncertainty about the risks posed by resurgence in COVID-19 cases and new variants. In October, the Fund forecast a 4.4% global GDP contraction for 2020, followed by a rebound to growth of 5.2% for 2021. IMF chief economist, Gita Gopinath, last week has said that economic stimulus measures in the United States and Japan would help to power a recovery in their economies in the second half of this year, and suggested that possible upgrades were in the offing.

Source: Reuters

4.ECB: Minutes from December meeting show strong support for latest package

Jan 14, 2021

The European Central Bank’s December meeting showed that policymakers expressed concerns over the recent appreciation of the domestic currency, which could have an adverse impact on the inflation outlook. The incoming data indicated a more pronounced near-term impact of the pandemic on economic activity and inflation, than what had been previously envisaged. The ECB saw the balancing act between “positive news regarding the availability of vaccines on the medium-term outlook”, and the “impact of the more negative latest news on infection rates and containment measures in the short term”.

Source: Bloomberg

5.OPEC+ Compliance with production cuts slips to 75%

Jan 12, 2021

OPEC+ Group’s compliance with the oil production cuts fell to 75 percent in December 2020—one of the lowest levels since the pact was enacted in May, 2020. The ten OPEC members, a part of the OPEC+ pact, complied at 82 percent with the production cuts in December, with compliance slipping by 10 percent, month over month. Recovering oil production from Libya led to yet another increase in OPEC’s output in December, the sixth rise in six months. The 13 members of OPEC produced 25.59 million barrels per day (bpd) of oil in the last month, a 280,000-bpd increase, compared to November, mostly due to a 150,000-bpd rise in Libyan crude oil production, as well as smaller increases in members with quotas, such as the United Arab Emirates (UAE), Iraq, Angola, and Nigeria.

Source: Reuters

6.Chinese exports grew more than expected in December

Jan 14, 2021

Exports rose 18.1% in December, from a year earlier, slowing from a 21.1% jump in November, but beating expectations for a 15% rise. Imports increased 6.5%, year-on-year, last month, topping a 5% forecast, and picking up pace from November’s 4.5% growth. Buoyant exports helped drive an impressive rebound in China’s key manufacturing sector last year, with the world’s second-biggest economy picking up the slack, as the pandemic crunched production in many countries. China is expected to be the only major economy to have grown in 2020. Exports rose 3.6% over the full year, and imports fell 1.1%.

Source: Hellenic Shipping News

7.Copper prices are supported by low inventory

Jan 13, 2021

Stocks in LME-registered warehouses suggest robust fundamentals. Copper stocks in LME-registered warehouses, at 102,550 tonnes, are down more than 40% since last October. Cancelled warrants - metals earmarked for delivery - at 36%, suggest that more copper is likely to leave LME warrant. Concerns about copper availability on the LME market have narrowed the discount for cash copper against the three-month contract.

Source: Reuters

8.Nickel prices rise on New Caledonian, and Philippine supply worries

Jan 13, 2021

Nickel prices gained on Wednesday, with Shanghai nickel climbing on worries about supply disruptions in top ore producers, New Caledonia and the Philippines. French mining group, Eramet, has warned that its nickel subsidiary, SLN, in the world’s fourth-largest nickel producer, New Caledonia, risked going into liquidation within weeks, if protests continued to disrupt its operations. A Philippine mining ban in the Tumbagan Island in Languyan, in the Tawi-Tawi province, home to some nickel projects, raised supply worries in the world’s second-biggest producer and top exporter of nickel ore.

Source: Reuters