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Watch: Market Movers Americas, Jan 11-15: Polar vortex could drive up US power, gas prices

In this week's Market Movers Americas, presented by Adriana Carvalho:

* US braces for possible polar vortex

* China looking into US, Canada met coal

* Container box rate increases likely amid operational capacity crunch

* US steel market sentiment bullish for January

* Latin America steels see nonstop price rally

View Full Transcript

Hello and Happy New Year. In this week's Market Movers Americas: Power and gas prices could rise in the US due to a forecast polar vortex; container box rate increases are likely amid an operational capacity crunch; and Latin American steel prices reach 10-year highs.

Starting off with power and gas markets …

Weather forecasts in the US are indicating potential polar vortex conditions for the third week of January, which brings Arctic air into the Midwest and Northeast.

These conditions pose upside risk to Northeast gas and power prices for the balance of January and February, although futures reflect some market skepticism, according to S&P Global Platts Analytics.

The upcoming major pattern change for many of the Central and Eastern states could also lead to a dramatic heating cost increase in the second half of January.

Moving to mining & metals …

China's ban on Australian coal exports continues to support US metallurgical coal prices, with the value for Platts Low Vol Hard Coking Coal FOB US East Coast spiking 33% since December 1.

Most of China's coking coal imports come from Australia, so the ban benefits other producers like the US and Canada, which may see met coal prices at levels not seen since the summer of 2019.

In the container market, box rates may see another uptick this week as capacity continues to lag demand. Consumer demand for containerized goods has not begun to taper off as many market participants had previously thought, and big-box retailers are scrambling to restore pre-pandemic inventories.

As for now, Hapag-Lloyd has nominated a $1,200 per FEU increase effective January 15. Yet some carriers may hold off, due to scrutiny from regulators.

Platts container rate 13 – North Asia to West Coast North America – rose $1,000 per FEU on January 4 and was assessed at $4,900 per FEU.

Bullish sentiment is expected to persist in January in the US steel market, according to the latest monthly survey of the market by S&P Global Platts, with most participants expecting higher steel and raw material prices in the coming weeks, as well as increased production, but unchanged inventory levels on average.

For the third month in a row, the raw materials index was the most bullish indicator at 91 points.

In Latin America, finished steel prices are expected to continue climbing to record highs as local and global supply-demand imbalances continue. In Brazil and Mexico, both longs and flat steel prices have faced multiple hikes since the beginning of the month, as the restocking period coincides with a period of extended lead times.

Brazilian steel export-oriented slab prices are marching toward $800 per metric ton, while the Mexican hot-rolled coil surpassed the $1,000 mark – both reaching the highest levels in 10 years.

For more on all the issues affecting commodity markets from wherever you are, make sure to check out Platts LIVE at the address displayed on your screen.

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