The highlights in Asia on S&P Global Platts Market Movers with Rohan Somwanshi, editorial team leader for agriculture in India:
* Markets assess impact of Joe Biden's victory in the 2020 US election on US-Asia trade flows
* Australian coal prices under pressure on geopolitical tensions with China
* Dry bulk freight rates to remain in check for the rest of 2020
* Eyes on China's liquidity, car production data and impact on steel markets
* USDA WASDE puts China's corn and soybean imports in focus
Market Movers Asia, Nov 9-13: Markets digest impact of Biden's win on US-Asia trade
This week: Markets digest US election results, Australian coal under pressure and USDA agricultural estimates report in spotlight.
Energy markets are closely monitoring the situation in US, after election results showed Joe Biden clinching the presidency as the vote count progressed in several states.
The outcome is expected to have a profound impact on US-Asia trade flows, and will determine global economic and energy policies. As for the US-China trade relations, the general expectation was that tensions will remain while the rhetoric gets dialed down.
However, the results are not expected to have an immediate impact on Asia's crude oil procurement trend. Still, major Asian refiners are closely tracking the developments to assess the future of US crude production and exports.
According to S&P Global Platts Analytics, Biden's plans to sunset drilling permits on federal lands could shrink US oil output growth by up to 2 million barrels per day by 2025. A more solid stance by Biden on fossil fuels may prompt many Asian crude importers to return focus to their staple, Middle Eastern sour crude. You can read more on the latest on the US election and its impact on Washington's energy policies on spglobal.com/platts.
Now for our social media question this week: Do you think Asian crude importers will make a big U-Turn on their crude import diversification strategies in 2021? Share your thoughts with the hashtag PlattsMM.
In bunker markets, eyes are on Singapore's bunker sales October data. Singapore's bunker sales are expected to be steady to slightly higher for the rest of the year with its strategic location and strong infrastructure making it a favorable bunkering hub, industry sources have told Platts. Port data shows total marine fuel sales in Singapore between January and September have remained strong, registering a 5.6% year-on-year growth. This comes at a time when global bunker sales are estimated to drop 7 to 17% in 2020, as the industry transitioned to the IMO's low sulfur mandate in the midst of market uncertainty.
In dry bulk shipping, fewer disruptions to ship supply and overall lower demand are expected to keep freight rates in check over the rest of this year. Australian iron ore exporters are also keeping an eye on the rising trade tensions between China and Australia, after an apparent ban was verbally communicated to traders, covering different commodities including coal.
High-ash Australian coal prices are expected to lose steam as political uncertainties loomed large in China. Chinese domestic coal prices are likely to gain amid limited import quotas for seaborne coal and domestic supply shortfall. Meanwhile, Indian seaborne thermal coal procurements are expected to remain limited ahead of the Diwali festival this weekend.
In metals, China will be releasing its car production numbers for October this week. The sector has improved in recent months, helping to support flat steel prices. Focus will be also on its money supply, loan growth and social financing numbers, which will show the extent of liquidity in Chinese markets.
Moving to agriculture, markets will be keenly watching the USDA's WASDE report this Tuesday, with spotlight on China's corn and soybean imports, and US soybean stocks. The USDA's attache in China raised its corn import s level projections for 2020-21 to 22 million mt, sharply up from the official estimates of 7 million mt. Markets are keeping an eye on the official numbers as China's corn commitments for US alone are above 10.6 million mt so far this season. China's 2020-21 soybean imports were also cut by 5 million mt, down from the official estimates of 100 million mt. This has come despite decent pig herd recovery in the country.
In wheat, Australia is expected to make a big production comeback this season. But the focus remains on the above-average rainfall seen in the eastern parts of the country, especially in New South Wales and Queensland. Forecast of wet weather in the coming weeks is expected to delay the dry down of wheat in the region, and could possibly impact the protein quality.
Thanks for kicking off your Monday with us. Have a great week ahead!