Abans Group Commodity World Round Up

29 May - 03 June

1 .OPEC+ had agreed to boost output by 648,000 barrels per day (bpd) in July

2 June 2022

OPEC+ said it had agreed to boost output by 648,000 barrels per day (bpd) in July - or 0.7% of global demand - and a similar amount in August versus the initial plan to add 432,000 bpd a month over three months until September. The move will be seen as a sign of willingness by Saudi Arabia and other OPEC Gulf nations to pump more after months of pressure from the West to address global energy shortages worsened by Western sanctions on Russia.

Source: Reuters

2 .US Federal Reserve's Lael Brainard says pause in rate hikes unlikely

3 June 2022

The vice chair of the US Federal Reserve said Thursday there is currently no reason to consider pausing rate hikes in September in the face of soaring inflation. She stressed the central bank's priority was to bring inflation down, even if the US economy will slow as a result, but said it was too early to determine when demand will ease and when the labor supply will increase. Following Fed chair Jerome Powell, Brainard noted that rate hikes are decided based on economic data. Any decisions for September will have to wait until data for the summer months has been published. In the short-term, Brainard said, two additional half-point rate hikes at the meetings on June 14-15 and July 26-27 seem to be "a reasonable kind of path."

Source: Forbes

3 .EU gives final approval to sanctions targeting Russian oil and Sberbank

2 June 2022

The European Union on Thursday gave its final approval to new sanctions on Russian oil and top bank Sberbank, after much wrangling with Hungary, as punishment for Russian President Vladimir Putin's Feb. 24 invasion of Ukraine. Apart from banning seaborne imports into Europe, the new sanctions also include an immediate ban on insuring ships carrying Russian oil elsewhere, an EU official told Reuters, while existing contracts are to be phased out over six months. EU experts say that would complicate Russia's efforts to find other markets for its crude.

Source: Reuters

4 .Saudi Arabia to raise oil production if Russian output falls under sanctions

1 June 2022

Saudi Arabia is prepared to raise its oil production if Russia's output falls substantially because of the western sanctions imposed on it. Saudi agreed to shift its stance and raise output to calm oil prices as part of a rapprochement with Biden administration, the report said, citing people familiar with the talks. The country has also assured to eventually respond by raising production should a supply crunch hit the oil market, the report added.

Source: Reuters

5 .China Factory Activity Falls in May, but Less Sharply

1 June 2022

China’s factory activity shrank in May 2022, but the pace is slower as COVID-19 curbs eased and improved from April's 26-month low. The Caixin manufacturing purchasing managers’ index (PMI) was 48.1 in May, which is better than 48 in the forecast prepared by Investing.com and 46 recorded in April 2022. The data is still below the 50-mark which separates growth from contraction. The data is in line with the official manufacturing PMI released on Tuesday which rose to 49.6 from 47.4 in April. Contraction in May was the second-sharpest slump since February, indicating a still-fragile recovery.

Source: Investing

6 .Iran's energy export revenue up 60% in March-May vs year ago

29 May 2022

Iran's energy export revenue is 60% higher in the first two months of the Iranian year (March 21 to May 21) compared to the same period a year ago. The Iranian government says it continues to export oil despite U.S. sanctions re-imposed in 2018 after former U.S. President Donald Trump withdrew from an agreement to restrain Iran's nuclear programme. Talks to revive the 2015 accord, and allow U.S. sanctions to be removed, have been on hold since March, chiefly over Tehran's insistence that Washington remove the Islamic Revolutionary Guard Corps from the U.S. list of designated terrorist organizations.

Source: Reuters

7. China a net exporter of zinc for the first time since 2014: Andy Home

31 May 2022

China exported more refined zinc than it imported in April for the first time since 2014. The country's imports collapsed over the first four months of this year with exports rising despite a 15% tariff on outbound shipments. The sharp shift in the country's trade dynamics speaks to the disconnect between east and west in the global zinc supply chain. London Metal Exchange (LME) inventory, by contrast, has fallen by 58% this year with almost half of the 84,675 tonnes remaining cancelled in preparation for load-out. Physical premiums in Europe and the United States are holding at record highs as smelter outages reduce availability.

Source: Reuters