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Market Movers Asia


Market Movers Asia, Nov 20-24: All eyes on China, India & Saudi Arabia's key oil data

With Alexis Gan

November 20, 2017 10:19:19 EST (2:39)

Asia's two biggest oil consumers - China and India - are set to release import and export data this week. Markets are also keeping an eye on Saudi Arabia's crude oil export, stocks and crude burn for power generation for September.


These reports come just days after the International Energy Agency cut its oil demand forecasts for this year and for 2018.


In metals, traders say China's alumina prices could fall further this week after the country's winter production cut policy kicked in on November 15, without any substantial cuts being announced. Prices are already down almost 5% from October. Will China's major producers follow through by announcing output cuts this week, and will the cuts be enough to keep prices from falling further?


And in agriculture, trading in Australian wheat is expected to pick up this week after prices fell to a near 3-month low last week. The price fall was attributed to a weaker Australian-US dollar exchange rate and ongoing harvesting.


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Video Transcript


This week, key oil data set for release by three countries, alumina prices fall in China, and Australia's wheat prices come under pressure.


Let's start with oil, key data is due for release this week by Asia's two biggest oil consumers, China and India, and their key supplier, Saudi Arabia. This comes days after the IEA cut its oil demand forecasts for this year and for 2018. It sees the market in surplus from mid-next year, even if OPEC extends production cuts from March to year end.


In the Middle East, the Arab League met Sunday to discuss the November 4 missile attack targeting Riyadh and possible action against Iran. Iran denies it was behind the attack on Saudi Arabia, but the gathering could exacerbate tensions between the two major crude suppliers.


In metals, China's alumina prices could fall further this week after the country's winter production cut policy kicked in last Wednesday without any substantial cuts being announced. Prices are already down almost 5 per cent from October.


Three major producers have all said they would support the move to cut output by 30 percent until mid-March, but will they follow through by announcing output cuts this week, and will this be enough to keep prices from falling further? What do you think? Join our conversation on Twitter with the hashtag PlattsMM.


In coal, buyers in China are worried more port restrictions will be imposed on thermal coal imports this week as year end quota limits are reached. Meanwhile, buyers and sellers are being urged by the NDRC to negotiate at least 75 per cent of their term contract coal requirements for next year at a mid-week industry event. They have been advised not to set prices for next year above the 2017 base price.


Finally, in agriculture, trading in Australian wheat is expected to pick up this week after prices fell to a near 3-month low last week amid a weaker Australian-US dollar exchange rate and ongoing harvesting. Forecasts of more rain across Australia could stall the harvest and if it persists into this week, crop quality could be compromised, traders said.


Premiums for raw sugar are expected to soften this week after a rally in futures and as sellers became more competitive. Raw sugar New York No. 11 front month futures hit a 5-month high last week, as production in Brazil was expected to fall more than 5 per cent next season due to the sugar mix favoring ethanol production amid higher gasoline prices.


That’s it for this week. Thanks for kicking off your Monday with us and have a great week ahead!





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