Market Movers Asia, May 15-19: China's commodity consumption in focus, El Nino concerns cloud palm oil output prospects - S&P Global
Market Movers Asia, May 15-19: China’s commodity consumption in focus, El Nino concerns cloud palm oil output prospects | S&P Global Commodity Insights
In this week's Market Movers Asia with Ernest Puey:
- Investors await cues from China's industrial production data
- China's crude steel output to decline
- Primary aluminum output likely to edge up
- Surge in demand may sustain in Asian thermal coal market
- El Nino may impact palm oil output in Asia
This week, the release of China's closely watched industrial production data is likely to offer fresh cues on the state of economic recovery in the world's largest crude oil importer.
The revival of China's economy has been a key source of optimism for global crude demand in 2023. But recent economic data out of the country reflects a patchy recovery.
In metals, the industrial production data is expected to show a fall in China's crude steel output, following a forecast of extended declines in its property and new home sales in April, which could impact steel prices.
However, primary aluminum production in China, is set to rise in May as healthy profit margins may incentivize domestic smelters to keep operating.
In Asian thermal coal, the recent revival of demand from China-based buyers is likely to continue as end-users stockpile ahead of summer.
If demand recovers, supply disruptions due to rains in various parts of Indonesia may lead to higher seaborne spot coal prices.
In agriculture, markets are cautious of the possible emergence of the El Nino climate phenomenon, which typically leads to dryness in parts of Asia. Emergence of El Nino may impact palm oil output in Malaysia and Indonesia in the second half of the year.
Market experts also expect the growth in palm oil production to slow down in May as palm trees will be stressed due to heat.
I'm Ernest Puey. Thank you for kicking off your Monday with S&P Global Commodity Insights.
Related Knowledge Center: ENERGY BASICS: hydropower
Hydropower — electricity generated by turbines capturing energy from moving water — was for many years the primary contributor of renewable energy to the U.S. electricity grid. Its growth was rapid into the 1970s, and since then has offered a stable supply of power, while a declining share of all generation. For many years, hydropower was seen as clean energy and an unalloyed good, but a greater understanding of the impact of dams on ecosystems and wildlife has led to the removal of some dams. As of 2019, hydropower trails wind as a renewable source of power generation.