Energy and Natural Resources Market

 

• China’s National Development and Reform Commission (NDRC) reported that China’s apparent fuel consumption has gained 12 percent (year-over-year) to an all-time high of 21 million tons in March. Consumption was up 14 percent on a daily basis from February.
• Aluminum shipments by North American service centers have rebounded in March according to Metal Service Centre Institute data. Total U.S. and Canadian shipments were 155 kilotons in March. This is the highest volume since October 2008 and represents a 25 percent month-over-month increase, 29 percent year-over-year.
• Chinese oil demand averaged 9.265 million barrels per day during the first quarter, up 1.1 million barrels on a year-over-year basis. Even at $4 per gallon of gas, gasoline demand in the U.S. maintained levels around 9 million barrels per day, according to the U.S. Department of Energy. This is just over 1 percent higher than the same period last year.
• Chinese exports of finished steel increased sharply in March to 4.8 million tons, from just 2.5 million tons in February and a monthly average of 3.5 million tons in 2010, according to a report.
• The National Bureau of Statistics reported this week that China’s refined copper production hit a record of 470 kilotons in March, up nearly 6 percent from the previous peak in December 2010.
• Improving labor market conditions helped U.S. consumer confidence increased in April after hitting a 16-month low in March. The U.S. economy has added jobs for six straight months and the unemployment rate has declined to a two-year low with the University of Michigan’s Consumer Confidence Index rising to 69.6 this week.
• Indonesia reported the highest recorded tin for export numbers this week. Tin surveyed for export prior to shipment (as required by the Ministry of Trade) increased by 38 percent year-over-year to 9,051 tons in March.

 

• After third quarter production fell 16 percent due to heavy rainfall in Australia and a mine shutdown in the Ivory Coast, Newcrest Mining cut its production forecast a second time. Output may total 2.82 million ounces for the 12 months ending June 30, 2011. This is lower than earlier forecasts the company made in January which ranged from 2.85 to 2.95 million ounces.
• The China Iron and Steel Association this week said that steel prices may rise because of higher raw material costs as demand for alloy accelerates. According to China’s NDRC, many domestic mills have weaker profit margins, around 3 percent, now that the spot price for 63 percent grade iron ore has reached $185 per metric ton. This has forced some Chinese mills to stop purchasing imported iron ore on the spot market.
• Chinese Central Bank Governor Zhou Xiaochuan said the tightening of China’s economy will continue in the battle against rising inflation. In a step toward this goal, the reserve ratio for Chinese banks is being raised by half a point. This comes after interest rates were raised just two weeks ago.

 

• India plans to import 35 million tons of coal for state-run power companies this fiscal year.
• The Chinese State Grid Corporation of China (SGCC) plans to buy 1.6 million tons of aluminum, 1.12 to 1.25 million tons of copper and 5 million tons of steel. This would be done in conjunction with the many power grid projects currently ongoing or planned in China.
• According to Bloomberg news this week, China’s Sinopec halted refined product exports to ensure domestic supply. Private refiners in China have cut back production as high oil prices and domestic retail price caps weigh on profits.
• The International Energy Agency (IEA) said last week that Japan’s oil demand may grow 30,000 barrels per day from a year earlier. This compares to a decline of 120,000 barrels per day that was forecasted previously.
• Reports this week stated that South Korea’s POSCO will raise domestic steel prices by 16 to 18 percent, the first hike in 10 months and higher than market expectations.
• Last week China’s largest electricity distributor, State Grid Corp., reported that China’s power demand may gain 12 percent this year.
• Global steel consumption is expected to rise 5.9 percent this year and 6 percent in 2012, according to the World Steel Association.

 

• The China Iron and Steel Association said that steel prices may rise because of higher raw material costs as demand for alloy accelerates.
• China will limit the expansion of nonferrous metals production to 8 percent per year, according to the former head of the China Nonferrous Metals Industry Association. The combined output of metals, including copper, aluminium and zinc will be kept within 41 million metric tons between 2011 and 2015 as part of the 12th five-year plan.
• Japan Iron and Steel Federation Chairman Eiji Hayashida told reporters that the earthquake has had a serious impact on Japanese manufacturers and domestic demand will likely fall even if there is demand for restoration and reconstruction. Customers, including carmakers, have slashed production following the earthquake.
• Iron ore inventories at 19 main Chinese ports are at their highest levels of the past several years, totalling 84.52 million tons, the NRDC says.
• Iran’s oil minister said this week that an increase in OPEC crude output would not succeed in bringing down global oil prices.