Abans Group Commodity World Round Up

23 May – 27 May

1 . US Federal Reserve is not getting more aggressive in tightening monetary policy 

May 26 , 2022

The minutes of the Federal Open Market Committee (FOMC) meeting held on May 3–4, 2022, which were released on May 25, 2022, struck a chord with investors. The markets celebrated as the Federal Reserve's minutes revealed that the central bank is not tightening monetary policy more aggressively but is keeping to its vow to raise short-term rates. The economy may be harmed in a rising interest rate environment, despite the fact that the FOMC minutes do not now indicate such a situation.

Source: Financial Express

2 .Memorial Day holiday that will flag off America’s peak driving season.

May 24, 2022

Despite high fuel prices, Memorial Day weekend travel in the United States is likely to be the busiest in two years as more Americans take the road to shake off coronavirus lock-ins. According to the American Automobile Association, the number of miles driven by motorists increased by 5.6 percent in the first three months of the year, despite the fact that the price of a gallon of standard gasoline has risen by 50 percent in the last year, to roughly $4.60 on average nationwide. According to the American Automobile Association, 39 million Americans are expected to hit the road starting Friday ahead of the holiday, despite the fact that record-high fuel prices are likely to result in fewer trips and shorter distances travelled this year.

Source: Reuters

3 .EU seeks Russian crude ban

May 26, 2022

President of the European Council, Charles Michel, expressed optimism that an agreement might be reached before the council's next meeting on May 30. Because EU penalties require unanimous approval, Hungary remains a stumbling hurdle. Hungary is requesting roughly 750 million euros ($800 million) in order to improve its refineries and build a pipeline from Croatia. Even without a legal prohibition, Russian oil is scarce because consumers and traders have shied away from the country's sources. According to Deputy Prime Minister Alexander Novak, Russia's oil production should fall to 480-500 million tonnes this year, down from 524 million tonnes in 2021.

Source: Reuters

4 .China’s demand for thermal coal is likely to keep falling

May 25, 2022

As viral restrictions continue to wreak havoc on China's economy, demand for thermal coal is expected to decline for the rest of the first half. Along with initiatives to increase output and stocks, this will provide China a greater chance of meeting peak power demand during the summer, when air-conditioning demands are at their highest, while also leaving enough of a buffer to keep industry supplied into the autumn. Meanwhile, output remains high as miners respond to the government's appeal for energy security.

Source: Bloomberg

5 .Europe's aluminium output slides as energy crunch bites: Andy Home

May 24, 2022

In the face of rising energy prices, Europe's primary aluminium smelters are continuing to reduce output. Over the last year, the region's output of light metal has decreased by 550,000 tonnes on an annualised basis. According to the International Aluminium Institute's latest estimate, primary aluminium output in Western Europe totaled 244,000 tonnes in April (IAI). The annualised run-rate fell to a new low of 2.97 million tonnes, down 13.2 percent from April of previous year. Annualized production has already dropped by 470,000 tonnes from its record of 3.44 million tonnes in May last year, just as power costs began to rise. The San Ciprian smelter in Spain, which produces 228,000 tonnes per year and has been idled by owner-operator Alcoa until 2024, when it will reopen using renewable energy.

Source: Reuters

6 .Freeport Indonesia targets 6.7% copper concentrate output growth in 2022

May 25, 2022

Freeport Indonesia plans to produce 3.02 million tonnes of copper concentrate in 2022, up from 2.83 million tonnes in 2021. Copper metal output is expected to reach 1.6 million lbs in 2022, up 20.1 percent from 1.34 million lbs the previous year. In 2022, gold metal output is expected to be 1.59 million oz, up from 1.37 million oz in 2018. This year's ore output is expected to climb by 22.75 percent to 64.88 million tonnes, up from 52.86 million tonnes in 2021.

Source: Reuters

7 .Saudi foreign minister does not expect immediate global oil shortage

May 24, 2022

When asked why Riyadh has refused US efforts to increase output, Saudi Arabia's foreign minister Prince Faisal bin Farhan Al Saud stated on Tuesday that the country does not expect an immediate scarcity of oil and just a limited shortfall of oil products. The Saudi minister was speaking to business leaders at the World Economic Forum in Davos, Switzerland.

Source: Reuters

8 .More Russian Oil Than Ever Before Is Heading for China and India

May 27, 2022

A record amount of Russian oil is on board tankers, with unheard-of quantities travelling to India and China as other countries ban imports due to the Ukraine conflict. The dramatic increase in Russian oil in transit by water demonstrates how the invasion has thrown the global energy economy into disarray, with the US, UK, and many EU corporations turning their backs on Russian supplies, pushing Moscow to hunt for clients in Asia. China and India have bought millions of barrels from the country, taking advantage of steep discounts on the shipments.

Source: Bloomberg