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Market Movers Asia


Market Movers Asia, Jun 11-15: US, N Korea leaders in Singapore for landmark meet

With Samuel Chin

June 11, 2018 09:50:00 EST (2:34)

US president Donald Trump and North Korean leader Kim Jong-un are set to meet in Singapore on June 12. This landmark event could result in an easing of sanctions on North Korea, and open up the country to international energy markets.


In line with the summit, the Singapore Maritime and Port Authority has imposed vessel restrictions in certain demarcated areas of Singapore's port waters until June 13.


In LNG, the outlook for prices in Asia is uncertain this week after edging higher last week. The supply outlook at several major LNG plants remains uncertain, with the Sabine Pass Train 3 reportedly shut for maintenance since June 1st and talk of loadings at Malaysia's Bintulu LNG returning to normal.


In petrochemicals, methanol supply is set to remain tight after an unplanned shutdown of the Brunei Methanol Company’s plant last week. The shutdown is expected to last for a week, with end-users and distributors in East Asia are being likely to be the most affected.


In thermal coal, the market is waiting to see if China will lift its 6% import tax on thermal coal from the US. China currently imports very little US-origin thermal coal, but this is expected to change if the import tax is removed.


In agriculture, domestic sugar prices in India have rallied since the Indian government fixed the minimum floor price at $433/mt on June 6. Offers from India have jumped $20 to around $365/mt FOB West Coast India since the announcement.


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Video Transcript


This week, US and North Korean leaders meet in Singapore, sugar prices jump in India, and methanol supply tightens after an unplanned shutdown.


But first, US president Donald Trump and North Korean leader Kim Jong-un are set to meet in Singapore on June 12. This landmark event could result in an easing of sanctions on North Korea, and open up the country to international energy markets. North and South Korea have already agreed to work towards a reconnection of cross-border rail, road and other economic links.


North Korea has relied on China for more than 90% of its trade over the last decade. Now, it could soon be seeking ways to diversify its trade partners, providing immediate opportunities for South Korea’s energy companies, including oil refiners.


Now to enchance security during the summit, the Singapore Maritime and Port Authority has imposed restrictions on vessel transiting, anchoring and remaining in certain demarcated areas of the port waters until June 13.


In LNG, the outlook for prices in Asia is uncertain this week after edging higher last week. The supply outlook at several major LNG plants remains uncertain, with the Sabine Pass Train 3 reportedly shut for maintenance since June 1st and talk of loadings at Malaysia's Bintulu LNG returning to normal. Weaker end-user demand in North Asia could add downward pressure to LNG spot prices this week, while expectations of short-covering at the prompt could provide support.


In petrochemicals, methanol supply is set to remain tight this week following the unplanned shutdown of the Brunei Methanol Company’s plant last week. The shutdown is expected to last for a week, with end-users and distributors in East Asia are being likely to be the most affected.


In thermal coal, the market is waiting to see if China will lift its 6% import tax on thermal coal from the US. China currently imports very little US-origin thermal coal, but this is expected to change if the import tax is removed, as part of efforts to reduce its large trade surplus with the US. Recent high prices for Australian thermal coal could also continue into the week, as strong demand and tight supply look set to continue providing support.


Finally, in agriculture, domestic sugar prices in India have rallied $25/mt since the Indian government fixed the minimum floor price at $433/mt last Wednesday. Offers from India have jumped $20 to around $365/mt FOB West Coast India since the announcement.


So, our question this week is, will Indian mills continue to offer into the international market if prices are stronger at home? Do send us your views on Twitter with the hashtag PlattsMM.


Thanks for kicking off your Monday with us and have a great week ahead.





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