Abans Group Commodity World Round Up

28 Jun- 02 Jul

1. UAE not opposing OPEC+ output hike

Jul 01, 2021

Reuters reported, citing OPEC+ sources, saying that the UAE does not oppose the principle of hiking output by the group but it wants its own production to be higher. The UAE wants to have its baseline production set at 3.84 million bpd versus 3.168 million bpd now. The group earlier appeared to have an agreement in principle to boost output by 400,000 barrels a day each month from August to December.

Source: Reuters

2. Global Demand for Aviation Fuel Still 30% Below Pre-COVID Levels 

Jul 01, 2021

Global demand for aviation fuel stood 30 per cent below pre-pandemic levels in early June and may not recover fully for two more years, according to a new study published by the International Energy Forum (IEF). International air travel is still operating at a fraction of its pre-COVID levels, with bookings for cross-border flights estimated at 20 per cent of pre-crisis levels at the end of April. Jet fuel accounts for most of the remaining oil demand shortfall caused by the pandemic, and the recovery is expected to be uneven as countries face the difficult trade-off between reviving the economy and managing the spread of COVID-19.

Source: hellenicshippingnews.com

3. OPEC oil output rises in June as demand recovers

Jul 01, 2021

The 13-member Organization of the Petroleum Exporting Countries has pumped 26.24 million barrels per day (BPD) in June, the survey found, up 740,000 BPD from May. Output has risen every month since June 2020 apart from in February. OPEC compliance with pledged cuts was 115%, the survey found, versus 122% in May. The biggest increase in June of 500,000 BPD came from Saudi Arabia as it further unwound its voluntary cut and raised output as part of the June 1 OPEC+ boost.

Source: Reuters

4. Goldman Sachs: Oil Markets To See Deficit Of 5 Million BPD By End 2021

Jun 30, 2021

Goldman Sachs analysts expect that the oil market will end in 2021 in a deficit of 5 million BPD as demand grows by another 2.2 million BPD in the second half of the year. This means that OPEC+ needs to bring more supply online to help narrow this deficit because other suppliers would find it more challenging to step in and boost production. Goldman earlier this year predicted oil prices would hit $80 per barrel before this year's end, citing tight supply and the strong rebound in demand. The bank stuck to this forecast even as OPEC+ loosened its production restrictions.

Source: Oilprice.com

5. Global nickel demand for battery use to rise 18% in 2021

Jun 29, 2021

Global demand for nickel used in batteries is expected to rise 18 per cent this year from 2020, backed by strong sales of electric vehicles (EVs) in China, Sumitomo Metal Mining, Japan's biggest nickel smelter, said on Tuesday. Sumitomo Metal Mining said the demand for nickel used in rechargeable batteries will increase to 228,000 mt in 2021 from 193,000 mt in 2020. The company also predicted that a global nickel market surplus will narrow to 58,000 mt this year from 132,000 mt in 2020 as robust demand from the stainless steel sector will offset the higher output of nickel pig iron (NPI) in Indonesia.

Source: Reuters

6. China’s factory activity growth slows slightly in June

Jun 29, 2021

Growth in China’s factory activity dipped to a four-month low in June, weighed by higher raw material costs, a global shortage of semiconductors and a resurgence of Covid-19 cases in the major export province of Guangdong. The official manufacturing Purchasing Manager’s Index (PMI) eased slightly to 50.9 in June versus 51.0 in May, data from the National Bureau of Statistics showed on Wednesday. It, however, exceeded analysts’ forecast for a slowdown to 50.8.

Source: Reuters

7. Cost of production of gold could be on the rise

Jul 01, 2021

The World Gold Council (WGC) has released a report highlighting the fact that the cost of production of gold could be on the rise. Costs in the gold mining industry increased for the second consecutive quarter in Q1 2021, with the global average All-in Sustaining Cost (AISC) up by 5% q/q to $1,048/oz, reaching its highest level since Q2 2013. The reason for the increase was due to mine site operating costs. Total Cash Costs (TCC) have risen 6% q/q to $769/oz. Some of this q/q change was caused by regular seasonal variations in costs in several countries. 

Source: Kitco News

8. US manufacturing sector grows moderately in June

Jul 01, 2021

U.S. manufacturing activity grew at a moderate pace in June, but employment contracted for the first time in seven months, likely because of rampant shortages of raw materials and labour. The Institute for Supply Management (ISM) said its index of national factory activity slipped to 60.6 last month, the lowest reading since January, from 61.2 in May.

Source: Reuters