Abans Group Commodity World Round Up

02 Aug- 06 Aug

1. China's widening Covid outbreak hits commodity prices

Aug 02 , 2021

Covid- Since the outbreak began at an airport in the eastern city of Nanjing last month, 19 cases have been discovered across at least 15 of China's 32 provinces. Today, another 99 cases were confirmed, bringing the total number of confirmed cases to almost 300. As a result of the limitations, retail gasoline and diesel sales in Nanjing have dropped by as much as 50% compared to levels before the recent epidemic, according to fuel retailers in the city.

Source: ArgusMedia

2. Gold market sees a trickle of ETF inflow in July – WGC

Aug 05 , 2021

According to the WGC's monthly global ETF monitoring report, 11.1 tonnes of gold poured into global ETFs in July, bringing the total amount of assets under management to $669 million, up 0.3% over the previous month. According to the study, overall ETF demand is currently at 3,636 tonnes, barely 7% down than the record levels observed in October. Despite the fact that the gold market continues to receive solid investor demand, the WGC claims that the inflows aren't enough to reverse the market's downturn from the first quarter of 2021.

Source: KitcoNews

3. China has built up vast Commodity reserves

Aug 05 , 2021

Analysts predict that China's strategic reserves contain 1.5 million to 2 million tonnes of copper, 800,000-900,000 tonnes of aluminium, and 250,000-400,000 tonnes of zinc, based on prior stockpiling activity. The reserves agency also has a large stockpile of cobalt, a vital battery metal, which industry sources believe China has 7,000 tonnes of. Nickel and other metals such as antimony, indium, germanium, and molybdenum oxide are also kept there. According to consultant Energy Aspects, China's SPR installations presently hold 220 million barrels of crude oil, which is enough to meet demand for 15 days.

Source: Reuters

4. China wants to curb steel production

Aug 01 , 2021

China intends to reduce steel output this year, but it may be difficult to do so. According to a Wood Mackenzie study, Chinese steel mills produced about 12 percent more crude steel in the first half of 2021 than in the same period in 2020. According to Reuters, China produced a monthly record of 99.45 million tonnes of steel in May, but that amount decreased to 93.88 million tonnes in June.

Source: Reuters

5. China's export, import growth seen moderating in July

Aug 06 , 2021

According to a Reuters poll, China's impressive export growth likely slowed in July due to an increase in COVID-19 cases around the world and continued severe pressure on global supply chains. When compared to significant drops a year earlier, statistical base effects are also helping headline trade numbers. Exports are estimated to have increased 20.8 percent year on year in July, compared to 32.2 percent in June, according to the median projection in a Reuters poll of 21 analysts. According to the poll, imports likely increased 33.0 percent year over year in June, compared to 36.7 percent in May. Despite China's efforts to bring down rising raw material prices, commodity prices continue to rise.

Source: Reuters

6. Japan's Q2 economic rebound likely feeble 

Aug 06 , 2021

According to a Reuters poll, Japan's economy recovered marginally in the second quarter from a severe drop at the start of the year, as strong exports and capital expenditure offset some of the impact of the coronavirus outbreak on consumer spending. However, analysts predict China's economy will lag behind those of other advanced economies as tighter state-of-emergency restrictions and a rise of diseases weigh on household spending. According to economists polled by Reuters, preliminary GDP data will show the economy gained an annualised 0.7 percent in April-June, following a 3.9 percent drop in the first quarter. According to the poll, GDP rose by 0.2 percent quarter over quarter.

Source: Reuters

7. U.S. unemployment rolls shrinking in boost to labor market recovery

Aug 05 , 2021

The number of Americans filing new unemployment claims fell even lower last week, while layoffs fell to their lowest level in nearly two decades in July, as businesses clung to employees amid a labour shortage. The Labor Department's weekly unemployment claims report, which provides the most up-to-date information on the economy, also revealed that the number of people on state unemployment rolls fell in late July to its lowest level since March 2020, when mandatory closures of non-essential businesses were imposed to slow the first wave of COVID-19 cases.

Source: Reuters

8. Bank of England sets out plans to wean UK economy off stimulus

Aug 05 , 2021

The Bank of England indicated on Thursday that it expects to see a minor reduction in the massive support it has given the British economy during the COVID-19 pandemic, and that it will gradually tighten monetary policy. Even though the central bank anticipates inflation to reach 4.0 percent by the end of the year, it has opted to retain its stimulus at full throttle for the time being. Markets expect the Bank of England to raise rates to that level only in late 2023 or early 2024, following a first rate hike to 0.25 percent in August of next year. When the rate reaches at least 1%, the Bank of England will contemplate actively selling down its gilt holdings.

Source: Reuters