Abans Group Commodity World Round Up

19th Oct – 23th Oct

1. China is one of the few Asian economies expected to grow this year. 

Oct 21, 2020

China is one of the few Asian economies expected to grow this year. The IMF has upgraded its 2020 growth forecast for the Asian giant to 1.9%, from its June projection of 1%, because of “a faster-than-expected rebound in the second quarter.” Next year, China’s economic growth is expected to pick up to 8.2%, according to the Fund’s forecast.

Source: CNBC

2. China has substantially increased purchases of U.S. farm goods

Oct 23, 2020

China has substantially increased purchases of U.S. farm goods, and implemented 50 of 57 technical commitments aimed at lowering structural barriers to U.S. imports since the two nations signed a trade deal in January, the U.S. government said on Friday. China had bought over $23 billion in U.S. agricultural goods to date, or about 71% of the target set under the so-called Phase 1 deal.

Source: Reuters

3. More Libyan oil set to return to the market 

Oct 23, 2020

NOC has gradually lifted force majeure on some of the oil terminals and oilfields, and Libya’s crude oil production has increased over the past month, from below 100,000 barrels per day (bpd) during the blockade, to as much as 500,000 bpd last week. Earlier this month, NOC announced that it had lifted the force majeure on the largest Libyan oilfield, Sharara, which has the capacity to produce more than 300,000 bpd. As of last week, Sharara was pumping around 100,000 bpd, and has further increased output to some 150,000 bpd.

Source: Reuters

4. IMF says Asia’s economy will shrink more in 2020

Oct 21, 2020

Asia is forecast to shrink by 2.2% this year, the IMF said in its latest Regional Economic Outlook report for Asia and Pacific. This is worse than the Fund’s June forecast for a 1.6% contraction. Asia’s economy is expected to rebound by 6.9% in 2021, which is an upgrade of the Fund’s June forecast of a 6.6% expansion. India is expected to shrink by 10.3% in the fiscal year ending March 31, 2021. This is worse than the 4.5% contraction forecast in June. The Philippine economy is forecast to contract 8.3% in the calendar year 2020, much more than the 3.6% contraction projected in June. Malaysia will likely shrink by 6% this year, worse than the IMF’s June forecast of a 3.8% contraction.

Source: CNBC

5. US working natural gas inventory rose by 49 Bcf: EIA

Oct 22, 2020

Thursday's weekly EIA report showed that gas inventories for the week of October 16 rose +49 bcf, to a 3-3/4 year high of 3,926 bcf, which was below the consensus of +52 bcf. Inventories are up +8.9% y/y, and are +9.1% above the 5-year average.

Source: Reuters

6. Global copper production to increase in 2021 after two years of declines: ICSG

Oct 23, 2020

The International Copper Study Group (ICSG) has released its copper market forecast for 2020-21, and expects this year will mark the second consecutive year of a decline in the world copper mine production. After a drop of 0.2% in 2019, the ICSG anticipates that global copper mine production will fall by about 1.5% this year, before growing by about 4.5% in the next year.

Source: Mining & ICGS

7. ILZSG: Lead and zinc demand forecast to drop 6.5%, 5.3%

Oct 22, 2020

The International Lead and Zinc Study Group forecast global lead and zinc demand to decline by 6.5%, and 5.3%, respectively, in 2020. However, demand for lead and zinc is expected to rise by 4.4%, and 6.6%, respectively, in 2021. The ILZSG has forecast that lead demand will fall to 11.39 million tonnes this year. Next year, ILZSG has forecast that the demand will pick up to 11.89 million tonnes. The ILZSG has forecast demand to fall to 12.98 million tonnes this year. Meanwhile, the Group’s forecast demand will pick up to 13.52 million tonnes in 2021.

Source: Metals Miners & ILZSG

8. Russia indicates support for extending output cuts

Oct 23, 2020

Russian President, Vladimir Putin, on Thursday, has said that Moscow did not rule out extending OPEC+ oil output cuts, but that assurance did not offset the expectations for rising Libyan output and demand worries, analysts said. Russia is working with OPEC, and other oil producing allies, in a group called OPEC+, to limit oil supplies, to drain a glut in the market, caused when the global demand slumped, due to the coronavirus lockdowns. The producers are reducing combined production by 7.7 million barrels per day (bpd). OPEC+ is scheduled to relax those cuts by 2 million bpd in January.

Source: Economic Times