If you'd like our market updates to be sent straight to your inbox, subscribe here.
- China has still not released its April trade import-export data. The world’s top importer of oil, metals and grains was due to release the data on the 23rd May. Investors are particularly frustrated by the delay as this data will be integral to understanding how the markets have been impacted by the ongoing two-way tariff threats between the US and China. The ongoing delay is leading to increased speculation regarding the reasons for the delay.
- Research by Singapore-based ship broker Banchero Costa indicates that 2018 will see the largest number of oil tankers scrapped in over 5 years. The increase in scrapping is predominantly driven by the looming IMO2020 which has imposed the need for ship-owners to comply to new environmental regulations as well as by weak earnings and firm prices for scrap steel.
- CBoT corn prices have hit a 6-week low with the front month contract having traded at $3.87 a bushel. Favourable weather across the Midwest has helped ease price concerns.
- Chinese domestic cotton prices have now risen almost 18% since early April prompting the China Cotton Association to try and calm the price volatility by stressing to investors that supplies were sufficient and announcing that the government are planning on allowing for more imports. The latest price surge was driven by weather concerns as top producing region Xinjiang experienced heavy rain and hailstorms.
- ICE raw sugar and arabica coffee prices have retreated from multi-month highs following the gradual return-to-normal operations in Brazil. Operations were disrupted by the nationwide trucking protests. July raw sugar is currently trading at 12.52c/lb, down just over 2%, and front-month arabica coffee is down almost 1% at $1.2275/lb.
- The US has imposed tariffs on steel imports from Canada, Mexico and the EU. All three are planning to respond with similar tariffs.
- SHFE copper has reached their highest price in 6-weeks on the back of a slightly softer USD and supply concerns. Supply concerns stem from ongoing wage negotiations at the Escondida mine in Chile, the world’s largest copper mine. The SHFE front-month contract is currently trading at $8,068/tonne.
- Robust demand, tight supply and low inventory levels are sustaining lead prices. The benchmark LME contract for 3-month delivery is currently at $2,450/tonne, near 3-month highs, and the SHFE contract for 1-month delivery is at Y20,000/tonne, near 8-month highs. The majority (80%) of demand for the commodity comes from the batteries sector.
Energy - UK
- Having been supported by coal prices and heavy Norwegian and UKCS maintenance, UK gas prices are under pressure. A well supplied system, compounded by an expected reduction in consumption are the main driving factors with the anticipated inflow of LNG and forecasted warmer temperatures over the coming week being predominantly responsible.
- European spot power prices have been supported this week by tighter supply from both nuclear and renewables. Tighter supply has outweighed the bearish effects imposed by slower demand over the bank holiday weekend.
Energy - International
- Oil prices are steady this week with Brent at $76.79 and WTI slightly up at $65.86 thanks to increasing demand going into the summer driving season.
- The Brent-WTI spread was at its widest in 3-years with WTI having traded at an $11 discount to the international benchmark last week.
- Defying the latest US sanctions, Iranian oil exports are at a record 2-year high having hit 2.7mbpd last month. Exports are their highest since international sanctions were lifted in 2016.
- Trump is expected to announce changes to US biofuel policy. The changes are intended to ease the disputes which have been increasing between the corn and oil refining industries which have been clashing over the future of the US Renewable Fuel Standard which dictates the amount of biofuel mandated to go into the US’s gasoline and diesel.