Latest News
-
China's June coal output increases to six-month high up on summer need
China's coal output rose to a sixmonth high in June, statistics bureau data showed on Monday, as mines increase production to satisfy seasonal need and safety evaluations that constrained production earlier in the year eased. The world's largest coal manufacturer mined 405.38 million metric lots of the fuel last month, a 3.6% increase on the year and the highest since December, data from the National Bureau of Stats (NBS) showed. The six-month high was computed by averaging out January-February production, since NBS reports the two months in a combined information release to ravel the results of the lunar new year holiday which falls in either month. Analysts at Galaxy Futures associated the greater output in June to seasonal effects from the Northern Hemisphere summer season increasing demand for a/c as temperature levels increase. They also mentioned an improvement in the rate of lethal mining accidents enabling some mines to reboot operations. Lower production from China's coking coal center of Shanxi had actually weighed on output throughout the March-May period after the local government ordered a series of security checks following an uptick in fatal mishaps, and told miners to curb excess production. The province mined 29% of China's coal in 2015. Typical everyday output in June rose to 13.5 million lots, according to ' computations using the NBS information, also the highest considering that December. Output will continue increasing in the third quarter because of seasonal need, the Galaxy Futures analysts anticipate. But July development might be constrained by China's third plenum, a key political conference happening July 15-18, during which authorities are anticipated to maintain some limitations on output to prevent accidents. The lower output during January-May continued to weigh on the year-on-year comparison for the very first half of 2024. Output in the January-June duration was 2.27 billion loads, down 1.7% compared to the same period last year.
-
VEGOILS-Palm oil almost flat as freight property surveyor data considered
Malaysian palm oil futures were little altered on Monday as traders awaited export price quotes from freight surveyors for the July 115 period for further hints. The benchmark palm oil agreement for September shipment on the Bursa Malaysia Derivatives Exchange ticked up 2 ringgit, or 0.05%, to 3,917 ringgit ($ 838.40) a metric load by the midday break. The contract fell 3.1% recently. Weak point in rival oilseeds had actually pushed Malaysian palm oil futures to open lower at 3,878 ringgit. Nevertheless, a sharp recovery in Dalian's palm olein rate raised FCPO prices back above the 3,900 ringgit mark, a Kuala Lumpur-based trader stated. Expectations of better exports have actually pulled Malaysian palm oil futures greater however weakness in competing oils capped the gains, stated Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & & Co. . Dalian's most-active soyoil contract fell 0.47%,. while its palm oil agreement lost 0.26%. Soyoil rates. on the Chicago Board of Trade were down 1.91%. Palm oil is impacted by price movements in related oils as. they contend for a share in the global veggie oils market. Cargo property surveyors are expected to release their quotes of. Malaysian palm oil exports for July 1-15 later on Monday. Malaysia's benchmark unrefined palm oil futures are anticipated to. typical between 3,850 ringgit and 4,000 ringgit ($ 823.53 and. $ 855.61) per metric lot this year, a slight boost from the. 3,800 ringgit per ton average in 2023, the Malaysian Palm Oil. Association said on Monday. Oil regained ground on Monday, with political uncertainty in. the United States and the Middle East supporting costs,. balancing out down pressure from a more powerful dollar and weak. demand in leading importer China. Brent crude futures rose 15 cents, or 0.2%, to. $ 85.18 a barrel by 0425 GMT after calming down 37 cents on. Friday. More powerful petroleum futures make palm a more appealing. choice for biodiesel feedstock. The ringgit, palm's currency of trade, weakened 0.11%. versus the dollar, making the product cheaper for. purchasers holding the foreign currency. Palm oil might evaluate support at 3,890 ringgit per metric lot, a. break below which might break the ice towards 3,850 ringgit,. technical expert Wang Tao stated.
-
China June aluminium output greatest in almost a decade; H1 up 7%.
China's production of primary aluminium in June increased to the highest level in nearly a. decade, and output in the very first half grew 7% as manufacturers ramped. up production amid greater profits. The world's greatest aluminium producer churned out 3.67. million metric tons of main aluminium, 6.2% higher year on. year, information from the National Bureau of Data (NBS) showed, That marked the greatest single month of production in. ' records that go back to November 2014. Last month saw China's northern area of Inner Mongolia add. some brand-new capability, and the southwestern province of Yunnan. resume most of its production thanks to enough hydropower. supply in the summer rainy season, according to a report by. details provider Shanghai Metals Market. That brought overall production in the very first half at 21.55. million tonnes, an increase of 6.9% from the same duration in 2015,. NBS information revealed. The increases were sustained by greater revenue margins in the. industry thanks to a rise in aluminium costs as financiers held. a positive view of demand for the light metal along with. funds buying into the base metals sector. The most-traded aluminium agreement on the Shanghai. Futures Exchange (SHFE) struck a two-year high of over 22,000 yuan. ($ 3,030.39) per ton in late May, up 15% from the beginning of. this year. The agreement is currently around 20,000 yuan per ton. Thanks to a price rise and lower electrical energy expenses, the. industry delighted in a typical profit margin of 2,818 yuan per load. in the very first half of this year, more than doubling from 1,211. yuan a year previously, according to research study house Antaike. Nevertheless, the growing output added to a stock. build-up in China, where need has been subdued by a drawn-out. home crisis and surging rates. Aluminium is mainly used in construction, transportation and. product packaging. Deliverable stocks in SHFE storage facilities have. piled up over current months to a 15-month high up on Friday. Smelters are likely to keep production high in the second. half, with 2 China-based metals experts stating they anticipate. 2024 output to increase by 3% from in 2015's 41.59 million heaps. Production of 10 nonferrous metals - consisting of copper,. aluminium, lead, zinc and nickel-- rose 7.5% to 6.61 million. tonnes from a year earlier. Year-to-date output was up 7.1% at. 39 million tonnes. The other non-ferrous metals are tin,. antimony, mercury, magnesium and titanium.
-
MORNING quote EUROPE-Trump shooting ricochets in Treasuries
A take a look at the day ahead in European and worldwide markets from Stella Qiu. Shock at the effort to assassinate former President Donald Trump is driving markets this Monday. For traders, their preliminary reaction has been to purchase the U.S. dollar and bitcoin and sell longer term U.S. Treasuries-- the so-called Trump-victory trades-- as the incident galvanises his possibilities of winning back the White Home. Futures for 10-year Treasuries slipped, pointing to higher yields. Investors have tended to react to the prospect of a Trump win by pushing Treasury yields higher, in part on the assumption his economic policies would contribute to inflation and financial obligation. Federal Reserve Chair Jerome Powell speaks later on in the day, which's a similarly high-stakes occasion that could sway bets of a September rate cut. Europe is headed for a drop at the open, with EUROSTOXX 50 futures down 0.5%. Euro zone industrial production information is due later on in the day where economic experts are looking for a 1.9%. drop for April, which will feed into expectations around the. European Central Bank Thursday rates review. ECB chief Christine Lagarde likewise speaks on Monday, but the. upcoming rate choice is not likely to shock markets which see. a 95% possibility of a stable 3.75% policy rate. The. policy declaration will worry that inflation is coming under. control but remains resilient, and upcoming information will be essential for. timing the next rate cut. Likewise coming up are incomes results from Wall Street giants. BlackRock Inc and Goldman Sachs on Monday. The. expectations will be high after their rivals Citigroup and. JPMorgan reported huge growth in investment banking incomes. Back in Asia, Chinese data showed it missed growth. expectations in the second quarter, highlighting the need for. more stimulus as a key management conference 3rd plenum gets. under way in Beijing. Also stressing was information showing home rates fell at the. fastest rate in 9 years in June, highlighting the continued. strains in the home sector. Still, individuals's Bank of. China kept an essential policy rate the same, signalling no intention. to cut benchmark loaning rate this month. Key developments that might influence markets on Monday: - ECB President Christine Lagarde to speak at Eurogroup. meeting in Brussels - Euro zone commercial production information - BlackRock, Goldman Sachs profits outcomes - Fed Chair Jerome Powell interview at the Economic Club of. Washington - Fed San Francisco President Mary Daly speaks
-
Australia's Rio Tinto to pursue development of solar farm for WA iron ore ops
Australia's Rio Tinto said on Monday it has actually accepted establish an 80 megawatt (MW) solar farm to facilitate the supply of renewable resource to its operations in Western Australia's Pilbara region. The solar farm could displace as much as 11% of natural gas currently used for generation across Rio's incorporated mining operations in the Pilbara, Rio stated. The project has the potential to decrease the miner's. emissions by approximately 120 kiloton carbon dioxide emissions per year. as soon as complete, it included. An expediency research study for the solar task, which is. anticipated to be situated beside Rio's existing Yurralyi Maya. Power Station near Karratha, will involve early 2025, with. commissioning to happen in 2027. 600MW to 700MW of renewable resource will be required by. 2030 to displace the majority of gas usage throughout Rio's Pilbara. power network, Rio projects, pressurized by further energy. requirements to support fleet electrification across its. portfolio, which is anticipated after 2030. Shares in the miner increased as much as 1% by 0426 GMT, in. tandem with a 1% rise in the Aussie mining sub-index.
-
China's refinery output at 6-month low as weak fuel demand hurts
China's refinery output fell 3.7% in June from a year previously, official data revealed on Monday, down for a 3rd month amidst organized upkeep, while lower processing margins and drab fuel demand pressed independent plants to cut output. Refiners processed 58.32 million metric tons of petroleum in June, data from the National Bureau of Stats (NBS) showed, equivalent to 14.19 million barrels daily (bpd), for the year's most affordable levels so far. Output for the very first six months was 360.09 million tons, or 14.44 million bpd, down 0.4% from the matching period last year, the data showed, for the very first decrease in year-to-date volumes because completion of 2022, according to ' records. The controlled production shows the broadly sluggish financial healing and refiners' constricting processing earnings, analysts and traders have actually stated. While a couple of state-run refiners have resumed operations after planned overhauls, functional levels at smaller sized independent processors in the eastern refining hub of Shandong province dipped further in late June to 50.92% of their capability, according to price quotes by Chinese consultancy Oilchem. That is the most affordable since at least the start of 2023 and down from 61.08% a year earlier, Oilchem information showed. Smaller plants are truly struggling with very weak margins, as need, particularly diesel, is falling behind expectations, said a Shandong-based petroleum trading manager with an independent refiner. During January and May, Chinese fuel demand dropped almost 2% on the year, with diesel down 14%, according to commodities consultancy Sublime China Information. China's economy grew much slower than anticipated in the second quarter, as a lengthy home recession and job insecurity squeezed domestic need. Both commercial output and retail sales slowed in June NBS information likewise showed China's crude oil production in June. increased 2.4% from a year earlier to 17.95 million loads, or about 4.37 million bpd. That is the greatest everyday volume because June 2015, ' records showed, an illustration of national oil business' efforts to increase domestic production from offshore fields and much deeper onshore reservoirs to increase supply security. Year-to-date crude oil output expanded 1.9% on the year to 107.05 million heaps, or 4.29 million bpd. Natural gas production leapt 9.6% last month from a year earlier to 20.2 billion cubic metres
-
China's June crude steel output eases as demand and margins shrink
China's unrefined steel output in June fell 1.3% from May, stats bureau information showed on Monday, curbed by dwindling need and diminishing steel margins. The world's biggest steel producer made 91.61 million metric lots of unrefined steel last month, information from the National Bureau of Data (NBS) revealed, versus 92.86 million tons in May. It was up 0.2% from a year previously, the data showed. Steel need alleviated last month as summer heatwaves and heavy rains in southern regions curbed building and construction activities. Supply pressures mounted amid seasonally slack demand, weakening market confidence, sending downward pressure to steel costs, said Kevin Bai, a Beijing-based expert at consultancy CRU Group. Likewise weighing on June output is that steel exports revealed indications of compromising last month. Steel exports moved by more than 9% from May to 8.75 million lots in June, customs data showed recently. In action to falling steel prices and higher stocks, several steelmakers scaled down output and some carried out devices maintenance. The June number represents a typical everyday output of about 3.05 million loads, the greatest considering that April 2023, according to calculations based upon the NBS information That is compared to about 3 million heaps in May and 3.04 million loads in June 2023. Daily output in June was higher than the previous month in part because June has one less day, said Ge Xin, a Beijing-based expert at consultancy Lange Steel. China produced 530.57 million tons of crude steel in the first half of 2024, down 1.1% from the exact same duration in 2023, NBS data revealed. Improved demand and much better margins are anticipated to drive up production in July, experts stated.
-
Bangladesh's Summit LNG encounters mooring problem after repair work
Bangladesh's Summit LNG stated on Sunday it has actually encountered troubles reconnecting a. floating storage and regasification unit (FSRU) to resume. liquefied gas (LNG) imports after it returned from. Singapore for repair work. Top LNG had paused operations on the FSRU after it was. harmed by a steel structure when Cyclone Remal lashed. Bangladesh in late May, and it stated force majeure on LNG. deliveries. The FSRU was then sent out to Singapore for repairs. Throughout preparation for mooring the FSRU with the. disconnectable turret mooring (DTM) plug in the subsea landing. pad on July 11, there was an unanticipated entanglement and damage. to the DTM buoy messenger line, Top LNG stated. Top said it had appointed divers who identified the. entanglement, however will require divers with more deep-dive. experience to fix it. For the retrieval and rectification of the messenger line. from the subsea floor and additional inspection, scuba divers with much better. dive-depth access and diving assistance vessels are required, it. stated in a declaration on Sunday evening. Additional hold-ups to the resumption of the FSRU will lengthen. Bangladesh's persistent gas lack. The system is one of the. country's two floating LNG import terminals that provides gas to. national grid. Summit said it has engaged a Singapore-based service. provider and is waiting for certified and knowledgeable deep-divers. and diving support vessels to reach the FSRU website for total. evaluation and correction by next week. Summit deeply comprehends the gravity of the unexpected setback. impeding the ship-to-ship transfer of LNG and re-gas send out. to the national grid and is actively working to discover an. immediate and safe option, it said.
OPEC+ changes method to safeguard market share: Kemp
Oil futures rates have been up to the most affordable level for four months and calendar spreads have plunged after OPEC+ ministers indicated their intent to begin increasing production from the fourth quarter of 2024.
Front-month Brent futures closed at $78 per barrel on June 3, the first day of trading following the OPEC+ ministerial conference on June 2, up just $2 per barrel compared with the exact same time in 2015.
Front-month Brent futures traded at a premium of $1.50 per barrel over contracts 6 months further forward (56th. percentile for all months because 2000) down from an average of. $ 2.85 (78th percentile) in May and $4.86 (95th percentile) in. April.
Chartbook: Brent calendar spreads
Following a hybrid conference held in Riyadh and online, OPEC+. revealed voluntary output cuts totaling up to 2.2 million barrels. daily (b/d) would be extended till completion of September 2024.
But the cuts will then be gradually phased out on a monthly. basis over the final quarter of 2024 and the first 3. quarters of 2025.
The scheduled production increases are subject to the caution. they can be paused or reversed based on market conditions,. ministers said.
But it is nevertheless a huge increment-- comparable to. roughly 18 months of normal development in international oil intake.
Inevitably, rates have actually fallen.
STRATEGY SHIFT
The scheduled production increases mark a modification of strategy. by OPEC+, led by Saudi Arabia, which had actually previously focused on. diminishing excess stocks and driving prices towards $100 per. barrel.
Instead, the group has switched its focus to stabilising, or. even restoring, some of the market share it has lost in the last. two years to competing manufacturers in the United States, Canada,. Brazil and Guyana.
Repetitive authorities and voluntary production cuts by Saudi. Arabia and other OPEC+ members have actually stopped working to raise costs,. though they most likely prevented a more serious decline.
Instead they have tossed a lifeline to higher-cost manufacturers. in the western hemisphere, motivating them to keep and even. boost output.
Dwindling OPEC+ market share has merely become too painful. and controversial to sustain; it brings unpleasant suggestions. about Saudi Arabia's function as a swing producer in the early. 1980s.
The scheduled increases are meant to signal there is a. limit to how far Saudi Arabia and its closest allies will cut. production on their own to support rates, and they do not. accept cuts are irreversible.
To stabilise and recapture market share, OPEC+ requires slower. growth in competitors' output and faster growth in consumption.
Both indicate lower costs to implement a slowdown in drilling,. promote fuel usage, and include more OPEC+ crude.
Extra production also implies stocks will be greater. than formerly expected, explaining the abrupt downturn in. spreads.
MAKING MORE SPACE
For OPEC+ to pump more, others should pump less, other things. equal, which requires lower costs to require a production. slowdown, especially in the price-sensitive and short-cycle U.S. shale sector.
Pre-announcing increases in OPEC+ production is meant to. avert even more increases in output by the U.S. shale sector,. partly through signalling and partly through lower costs. themselves.
By delaying the very first production increases till October,. and making them conditional on future market conditions, OPEC+. ministers have provided themselves some versatility.
Scheduled production increases can be delayed again if oil. intake development fails to speed up, stocks remain. comfy and prices stay under pressure.
However OPEC+ has actually signified an important shift in the direction. of policy. Having consistently thrown the shale sector a lifeline. in 2023, OPEC+ is preparing to squeeze it again in 2025.
Associated columns:
- OPEC? likely to extend production cuts in June (May 3,. 2024)
- Record U.S. oil and gas production keeps rates under. pressure (March 1, 2024)
- Western Hemisphere oil output surges, with a helping hand. from OPEC (February 21, 2024)
John Kemp is a market expert. The views expressed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.