Abans Group Commodity World Round Up

17 May - 21 May

1. Significant progress appears on US and Iran talks

May 21, 2021

 Iran's president said the United States was ready to lift sanctions on his country's oil, banking and shipping sectors. Iran and world powers have been in talks since April on reviving the deal, European Union official leading the discussions said on Wednesday that he was confident a deal would be reached. As per report, significant progress appears to have been made in the ongoing nuclear negotiations in Vienna and around 1 million barrels per day of additional Iranian oil looks set to potentially hit the market in the back half of this year.

Source: Reuters

2. Japan's exports jump most in decade

May 19, 2021

Japan's exports grew the most since 2010 in April, Japan’s Exports rose 38.0% in April from a year earlier, official data showed on Thursday, compared with a 30.9% increase expected by economists and following a 16.1% rise in March. That was the fastest gain since April 2010, led by U.S.-bound shipments of cars and car parts and Chinese demand for chip-making equipment. By destination, exports to China, Japan's largest trading partner, rose 33.9% year-on-year in April, led by shipments of chip-making equipment, hybrid cars and scrap copper.

Source: Reuters

3. Fed officials discussed adjusting money market support in April

May 19, 2021

The U.S. Federal Reserve in coming months may need to adjust the tools used to keep its benchmark policy rate well within its intended range if open market overnight borrowing costs keep drifting lower, readout of the central bank's latest meeting signalled on Wednesday. The Fed could consider adjusting administered rates "in coming months" if the downward pressure on overnight rates continues, Lorie Logan, manager of the System Open Market Account, told policymakers. The central bank could respond by raising the interest it pays banks for excess reserves (IOER) from 0.10% or adjusting the rate it pays on overnight reverse repo for non-banks, which is currently at 0%.

Source: Reuters

4. Tapering discussions pushed dollar down

May 21, 2021

The dollar has bounced after a mention of possible future tapering discussions in minutes from the Fed's April meeting, prompted fears of early rate rises. Investors now figure that any action remains a long way away and that the path might again be clear for a resumption of April's downtrend as the U.S. trade and account deficits weigh.

Source: Reuters

5. China to stabilise commodity market

May 19, 2021

China said it will strengthen its management of commodity supply and demand to curb any “unreasonable” increases in prices. Prices for commodities such as coal, steel, iron ore and copper – of which China is the world’s biggest user – have surged this year, fuelled by post-lockdown recoveries in demand and easing liquidity globally. China will step up adjustments on the trade and stockpiling of commodities and reinforce inspections on both the spot and futures markets. It will crack down on malicious trading and investigate behaviour that bids up prices.

Source: Mininng.com

6. Steel prices fall on Beijing’s efforts to cool markets

May 20, 2021

Chinese steel markets sold off for a fifth day today after Beijing warned again against "unreasonable" price increases. China’s main economic planning agency the NDRC sent regulators to Shanghai and Tangshan late last week to question mills about price rise and warned that those involved in illegal price increases would be prosecuted. Domestic steel prices rose to new record highs last week, including billet, which eclipsed a 2008 record on 12 May.

Source: Argusmedia

7.  IEA net-zero pathway could add to oil-price volatility: OPEC

May 21, 2021

The International Energy Agency on Tuesday said investors should not fund new oil, gas and coal supply projects if the world wants to reach net zero emissions by mid-century, in its starkest warning yet to curb fossil fuels. OPEC has said that an IEA report suggesting that investors should not fund new oil projects to curb emissions could lead to oil-price volatility if it is acted on "The claim that no new oil and gas investments are needed post-2021 stands in stark contrast with conclusions often expressed in other IEA reports and could be the source of potential instability in oil markets if followed by some investors," OPEC's report said.

Source: Reuters

8. Bank of Japan to extend pandemic relief if needed

May 19, 2021

The Bank of Japan (BOJ) will consider extending its current September deadline for its pandemic-relief programme if necessary, said BOJ Governor Haruhiko Kuroda, as the country battles a spike in COVID-19 infections. Japan’s economy shrank an annualised 5.1% in the first quarter as a slow vaccination rollout and a spike in COVID-19 cases hit spending on dining out and retail, according to data released on Monday. 

Source: Reuters