On this week's Platts Market Movers Asia with Managing Editor Niki Wang: China, India and other developing Asian economies are expected to push for fair emission norms and climate finance at COP26. (00:12)
Other highlights from Asia's commodity markets:
*OPEC+ meet this week amid demands for oil output hike (01:14)
*China to release state oil product reserves to domestic market (01:49)
*Steel output cuts in China's largest steelmaking hub (02:45)
* Export taxes and Covid-19 weigh on palm oil demand (03:42)
This week: OPEC+ meet in focus as Asia calls for a supply hike, China to release state oil product stocks in market, and palm oil markets brace for a demand shock.
But first, Asia-Pacific nations, some of the world's largest emitters of CO2, will shift their focus to the 26th United Nations Climate Change Conference or COP26 in Glasgow this week.
Countries like China, India and other developing Asian economies are expected to throw their weight behind two key issues – mobilization of $100 billion in annual climate finance for developing countries and a fair allocation of global responsibility to reduce emissions.
The meet comes amid an energy crisis in the region that has forced countries to take contingency measures to boost energy security.
Ahead of the meet, China has announced many climate change initiatives including a detailed action plan to peak emissions by 2030. Asia's developed economies like Japan and South Korea have announced strict net zero goals. Australia also announced its own net zero goal but devoid of a roadmap.
Moving to oil, market watchers keep a close eye on the next OPEC+ meeting scheduled for November 4, where output decisions for December will be reviewed. The meeting comes amid demands from Asian users for a more aggressive production and supply hike.
Retail gasoline prices across major Asian cities have surged to multi-year highs, impacting regional inflation rates. International benchmark crude prices extended their rally, with Platts physical sour crude benchmark Cash Dubai rising to a fresh 3-year high.
To offset the shortage in domestic markets and stabilize prices, China said it will release state oil product reserves to the domestic market. It is part of the government's efforts to ensure domestic supplies and to control inflation by capping energy prices.
That brings us to our social media question for the week: Do you think OPEC+ should reconsider its oil output plans to ease high oil prices? Share your thoughts on Twitter with the hashtag PlattsMM.
And Australia's condensate sales are improving at a rapid pace as gasoline blending requirements increase across Asia to boost transportation fuel output.
The demand for transportation fuel has increased amid easing COVID-19 mobility curbs. Refiners based in South Korea, Indonesia, Singapore and Thailand are lining up to purchase Australian ultra-light crude.
Moving to metals, China's largest steelmaking hub Tangshan announced curbs on steel output to tackle air pollution in the city. Market participants said this may lead to suspension of an additional 19,000 metric tonnes per day of capacity. Last month, China had called the steel industry to continue capping its iron and steel making capacity as part of its national carbon peaking action plan.
Meanwhile, thermal coal prices have come off their highs following intervention by China last month.
In petrochemicals, a 15% fall in China's domestic spot polypropylene prices from the highs in mid-October has led to an export arbitrage window. Southeast Asian buyers will keep a close eye on the competitive China-origin polypropylene, with limited buying interest expected for South Korea and Middle East cargoes.
Moving to palm oil, comfortable stock levels in India and a fresh pandemic outbreak in China weigh on demand. Market participants said Indonesia's higher export taxes may cause buyers to switch to soybean oil, adding to the demand shock.
Thanks for kicking off your Monday with us. Have a great week ahead!