Abans Group Commodity World Round Up

8 Nov- 12 Nov

1 . China power curbs cut 7% of annual aluminium capacity - Wood Mackenzie

Nov 12 , 2021

China's power-use restrictions have reduced domestic aluminium yearly capacity by roughly 7% so far this year, according to consultant Wood Mackenzie. Power cuts at copper smelters and refineries have reduced refined output by roughly 60,000 tonnes, or less than 1% of China's overall production capacity. The power limits lowered stainless steel melt output by 850,000 tonnes and nickel pig iron (NPI) output by 35,000 tonnes, resulting in a 111,000-tonne reduction in nickel consumption in 2021.

Source: Reuters

2 . Fitch has revised down Iron Ore price forecast 

Nov 12 , 2021

Fitch has lowered its Iron Ore pricing projection from $170 per tonne in 2021 to $155 per tonne and $110 per tonne in 2022. The iron ore price surge has stopped, with prices falling to levels below those predicted by Fitch Solutions in its current industry study. According to Fitch, Chinese demand for iron ore peaked in H121, owing to the country's V-shaped economic recovery and the government's significant stimulus programme to help the building industry.

Source: Mining.com

3 . Codelco’s Chinese customers are reluctant to sign up for copper supply in 2022

Nov 11 , 2021

Due to substantial backwardation in the copper market, Codelco's Chinese customers are hesitant to sign up for copper supply in 2022 at the biggest premium in seven years. On November 1, Chile's Codelco offered physical delivery of copper to Chinese clients at a premium of $105 per tonne over London Metal Exchange (LME) pricing for the following year, the highest level since 2015. On Oct. 18, the difference between cash and three-month LME copper prices reached a new high of more than $1,100 per tonne, as stockpiles fell to their lowest level since 1974. Although the backwardation has already decreased to $160 per tonne, purchasers remain hesitant to sign up while prompt prices are still higher.

Source: Reuters

4 . Global Bond Rout Shows Doubts on Central Banks’ Rates Patience

Nov 10 , 2021

Global bond yields are rising after a larger-than-anticipated increase in US inflation rekindled fears that central banks may be obliged to raise interest rates sooner than predicted. Money-market traders upped their bets for the Fed's first hike forward two months to July, despite the fact that they're only pricing in only two quarter-point hikes in 2022, indicating little fear that the bank will face runway inflation. After announcing a start to cutting bond purchases, Fed Chair Powell warned last week that authorities might be patient in raising interest rates, but won't hesitate to act if inflation warrants it.

Source: Bloomberg

5. China to step up strategic mineral resource exploration during 2021-2025

Nov 11 , 2021

During the period 2021-2025, China will increase exploration of strategic mineral resources such as petroleum, natural gas, copper, chrome, tungsten, rare earths, and others, according to the country's top economic planner. On its website, the National Development and Reform Commission published a plan for promoting development in resource-dependent regions.

Source: Reuters

6 .OPEC cut its 2021 oil demand forecast due to high prices

Nov 11 , 2021

On Thursday, OPEC cut its global oil demand prediction for 2021, citing weaker demand in big customers China and India, as well as the projected impact of rising energy costs. The cartel of major oil producers decreased their projection by roughly 160,000 barrels per day in a monthly report. In 2021, global consumption is expected to reach 96.4 million barrels per day. According to OPEC, global oil demand would climb to 100.6 million barrels per day in 2022, up 500,000 barrels per day from the year before the epidemic.

Source: Live mint

7 . Global oil oversupply by early 2022 anticipated: EIA

Nov 09 , 2021

The EIA noted in its Short Term Energy Update on Tuesday that global oil demand has outpaced production for five quarters in a row and would continue to do so through the end of 2021. Total petroleum stocks among nations in the Organisation for Economic Cooperation and Development declined by 424 million barrels during the five-quarter shortage, according to the agency. Supply should outpace demand for the first time since the second quarter of 2020, thanks to increasing production from Opec+ countries, higher totals from US producers, and a slowing trend in global oil consumption.

Source: Bloomberg

8 . Euro zone inflation to remain above ECB's target next year

Nov 12 , 2021

According to a Reuters survey of experts, the euro zone's inflation forecasts are at risk of continuing to exceed the European Central Bank's 2 percent objective next year. Despite the fact that inflation soared beyond 4% last month, more than double the ECB's objective, the Bank, unlike most other central banks, has resisted calls for tighter policy, claiming the increase is temporary and will decline next year. Inflation in the euro zone is expected to average 2.2 percent next year, up from 2.4 percent this year, compared to 1.8 percent and 2.3 percent forecasted in October. These projections are higher than the ECB's 2.2 percent and 1.7 percent projections respectively.

Source: Reuters