Abans Group Commodity World Round Up

28 Feb – 4 Mar

1 .Metal price rally gains momentum

3 March 2022

Russia and Ukraine conflict has fanned the flames of the already stretched base metals markets. Bloomberg reported on Wednesday the market is so tight in Europe that traders have been switching to break-bulk vessels to ship metal all the way from warehouses in Malaysia’s Port Klang – even before the war broke out. Zinc topped $4,000 a tonne for the first time in nearly 15 years after rising some 4% during the day. Zinc inventories are at their lowest point since July 2020. Nickel jumped 6% to its highest since April 2011 at $27,815 a tonne, with premium for prompt delivery metal rising above $600 a tonne again after touching a record $645 last week. Copper prices rallied to a high of $4.7825 a pound ($10,545 tonne) in New York, levels last seen in May last year.

Source: Mining.com

2 .Copper production falls at major Chile mines in January

3 March 2022

Copper production by Codelco fell 15% year-on-year in the month to 120,800 tonnes. Output from Escondida fell 4.4% year-on-year to 81,000 tonnes in January. Collahuasi recorded a year-on-year decrease of 10% in its production in the month to 51,300 tonnes. Chile’s nationwide total production fell 7% in January to 425,700 tonne, according to data from Cochilco.

Source: Reuters

3 .Fed's Powell: Ukraine war impact uncertain but could hit spending, investment

3 March 2022

Russia's war in Ukraine could hit the U.S. economy across a variety of channels from higher prices to dampened spending and investment, Federal Reserve Chair Jerome Powell said Thursday, though it is unclear what the ultimate impact will be. Powell said that the Fed was watching the situation carefully and had begun running simulations, for example, on what persistent increases in oil prices might have on the economy. Powell said that so far the war has not changed the central bank's plans to raise interest rates beginning at its March meeting to try to bring down the pace of price increases that are currently running at three times the Fed's 2% annual target.

Source: Reuters

4 .US says Iran nuclear deal 'close' but not certain

4 March 2022

The United States said Thursday that "a possible deal" on a new Iranian nuclear accord is close but several sticking points have prevented an agreement and time is running out. Negotiators meeting in Vienna to try and salvage the 2015 nuclear deal, which is meant to prevent Tehran from acquiring an atomic bomb, have made "significant progress," State Department deputy spokeswoman Jalina Porter told reporters, echoing other nations in recent weeks. Several observers believe that the West could leave the negotiating table and chalk the deal up to a failure if a compromise is not reached by this weekend.

Source: AFP

5 .The U.S. and 30 other nations are releasing oil from reserves to try to calm markets

1 March 2022

The United States and other members of the International Energy Agency are releasing 60 million barrels of oil from their strategic petroleum reserves after crude prices surged following Russia's invasion of Ukraine. This time around the U.S. will release 30 million barrels from its reserves as part of the IEA action with 30 other countries.

Source: NPR

6. OPEC sticks to plan of gradual output hikes as crude soars

3 March 2022

The leaders of OPEC and its oil-producing allies are sticking with their plan to gradually increase oil production while Russia’s invasion of Ukraine rattles markets, reshapes alliances, kills civilians and sends the price of crude skyrocketing. The OPEC+ coalition of oil producers — made up of OPEC members led by Saudi Arabia and non-cartel members led by Russia — chose to increase oil production by 400,000 barrels per day in April. OPEC’s decision to stick with only modest supply increases while Russia is waging a war is likely to prolong higher oil and gas prices.

Source: ABC News

7 .China's Feb service sector activity growth accelerates- official PMI

1 March 2022

Activity in China's services sector grew at a faster pace in February. The official non-manufacturing Purchasing Managers' Index (PMI) was at 51.6 in February versus January's 51.1, data from the National Bureau of Statistics (NBS) showed. The 50-point mark separates growth from contraction on a monthly basis. China's official composite PMI, which includes both manufacturing and services activity, stood at 51.2, compared with 50.1 in January.

Source: Reuters

8 .UK construction sector activity strongest in Feb since mid-2021 –PMI

4 March 2022

Britain's construction sector grew at its fastest pace since mid-2021 in February as disruption from the Omicron coronavirus wave eased and input costs rose at the slowest pace in nearly a year, a survey showed on Friday. The IHS Markit/CIPS UK Construction Purchasing Managers' Index (PMI) jumped to 59.1 from 56.3 in January, its highest since June last year. A Reuters poll of economists had pointed to another reading of 56.3.

Source: Reuters