Abans Group Commodity World Round Up

26 Apr - 30 Apr

1. Fed holds rates near zero

Apr 28, 2021

The US central bank decided to keep short-term interest rates anchored near zero as it buys at least $120 billion of bonds each month. The latter part of policy is a two-pronged effort to support an economy that grew strongly to start 2021 as well as to support market functioning at a time when 30-year mortgages still go for around 3%. Fed Chairman Jerome Powell said the recovery is “uneven and far from complete.” While he noted that inflation pressures could rise in the coming months, these “one-time increases in prices are likely to only have transitory effects on inflation.”

Source: Bloomberg

2. OPEC expect oil demand to grow this year

Apr 27, 2021

The OPEC+ joint technical committee (JTC) has kept its forecast for growth in global oil demand this year, but is concerned about surging COVID-19 cases in India and elsewhere. OPEC+ forecasted that oil demand this year would increase by 5.95 million bpd. This was an upward revision of 70,000 bpd from an earlier projection, and this fact injected optimism in traders, as did OPEC+'s decision to forego a meeting this week and keep producing at previously agreed rates.

Source: Reuters

3. China’s 2021 gold demand is likely to revert to pre-pandemic levels: WGC

Apr 29, 2021

China’s 2021 gold demand will see annual growth and will revert to pre-pandemic levels if there are no dramatic changes to the global economic and geo-political situation, as per WGC official. China saw consumer demand in the first quarter of 2021 rise to 286.4 tonnes from the previous quarter, a stark contrast from the trend of global gold demand which sank to a 13-year low. China’s March net gold imports via Hong Kong surged to their highest since December 2019 after new import quotas were issued by the central bank due to improved demand. China’s 2020 gold consumption and imports plunged due to the coronavirus outbreak.

Source: WGC, Reuters

4. China adjusts tariffs, tax rebates for steel products

Apr 28, 2021

China will exempt temporary import tariffs for some steel while removing export tax rebates for most of its steel products, the finance ministry said on Wednesday, as the world's top steel producer seeks more materials to feed domestic demand. Export tax rebates for 146 steel products will be removed, also effective May 1. About 33.35 million tonnes of steel exports could be affected from exemption of tax rebates. China exported 53.67 million tonnes of steel products in 2020 and brought in 20.23 million tonnes of the metals. Meanwhile, the country will also raise temporary export tariffs for high-purity pig iron and ferrochrome to 15% and 20%, respectively, export tariffs for ferrosilicon will be hiked to 25%

Source: Reuters

5. Copper prices can surge to $15000 by 2025: Goldman Sachs

Apr 26, 2021

With demand increasing and supply constraints ongoing, Goldman Sachs thinks the price of the red metal can surge to $15,000 by 2025. Copper production declined in 2020 due to government restrictions and lockdowns during the Covid-19 pandemic. The world's largest copper producers, Chile and Peru, were hit especially hard by the pandemic, which could impact supply until 2023. Goldman Sachs "now estimate a long-term supply gap of 8.2 million tons by 2030, twice the size of the gap that triggered the bull market in copper in the early 2000s.

Source: Bloomberg

6. China's factory activity growth slows in April

Apr 30, 2021

China's factory activity growth slowed and missed forecasts in April as supply bottlenecks and rising costs weighed on production and overseas demand lost momentum. The country's official manufacturing purchasing managers' index (PMI) fell to 51.1 in April from 51.9 in March, data from the national Bureau of Statistics (NBS) showed on Friday. China's economic recovery quickened sharply in the first quarter of the year with record growth of 18.3%, shaking off the hit from last year's COVID-19-induced slump. Analysts now expect the world's second-largest economy to grow 8.6% in 2021.

Source: Reuters

7. US economic growth accelerated in the first quarter

Apr 29, 2021

US economic growth accelerated in the first quarter as the government gave money to mostly lower-income households, fuelling consumer spending and setting the course for what is expected to be the strongest performance this year in nearly four decades. The second-fastest gross domestic product growth since the third quarter of 2003, reported by the Commerce Department, left output just 0.9% shy of its level at the end of 2019. Economists expect a full recovery from the pandemic recession, which started in February 2020, in late 2023.

Source: Reuters

8. Bank of Japan lifts growth forecast, keeps policy unchanged

Apr 28, 2021

Japan's central bank raised its growth forecasts for the world's third-largest economy, citing expected stronger demand, and left its ultra-loose monetary policy in place. It acknowledged that the outlook remains "highly unclear" and could change depending on how the still-raging coronavirus pandemic evolves and affects the domestic and international economy.  It revised up its forecast for the 2020-2021 fiscal year that ended on March 31, projecting the economy would shrink 4.9 percent, compared with the 5.6 percent contraction it predicted in January. For the current fiscal year, it now expects 4.0 percent growth, against its January forecast of 3.9 percent, while it lifted its expectations for the fiscal year ending in March 2023 to 2.4 percent, from 1.8 percent previously.

Source: Bloomberg