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Market Movers Asia


Market Movers Asia, Jun 25-29: Oil markets weigh impact of OPEC/non-OPEC deal

With Joyce Zhang

June 25, 2018 09:50:00 EST (3:13)

All eyes will be on how oil markets react this week as they weigh the impact of the OPEC/non-OPEC deal agreed on June 22. The monitoring committee overseeing oil output deal agreed to an output increase, but provided no details on allocations.


In Asia, plenty of buyer-seller negotiations will likely take place in the Southeast Asian light sweet crude market this week following the emergence of August loading program for Kimanis crude last week.


In petrochemicals, China has notified producers in South Korea, Taiwan, and the US of its final antidumping duty rates for styrene monomer imports. Duties on cargoes from South Korea and Taiwan have been lowered, while higher rates have been imposed on cargoes from the US. The decision comes amid an escalating trade war between China and the US.


Still on the China-US trade war,this time in metals, sources say the potential 25% China tariff on US coking coal could lead to defaults on recent trades. The tariffs have yet to be confirmed, but market participants expect it to be imposed in July, shortly after the US tariffs on Chinese goods are due to take effect on July 6.


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Video Transcript


This week, markets weigh the impact of the OPEC and non-OPEC agreement, Southeast Asian light sweet crude trade talks pick up, and US-China trade tension lingers.


Let’s start with oil - the monitoring committee overseeing the OPEC and non-OPEC production deal Friday agreed to an output increase, but provided no details on allocations. The tense negotiations ended with a commitment to slightly less than 1 million b/d of theoretical output increases to current levels, distributed across all the 24 members of the OPEC pact with allies, including Russia.


Zooming in on Asia, plenty of buyer-seller negotiations will likely take place in the Southeast Asian light sweet crude market this week following the emergence of August loading program for Kimanis crude last week. The loading program showed nine cargoes, down from 12 cargoes due to load next month.


Tighter supply may provide some support for Kimanis spot differentials, but a slew of arbitrage flows from the US, as well as the lengthy maintenance at Malaysia's Port Dickson refinery, may keep a firm lid on premiums.


In thermal coal, 6,000 NAR prices are trading at near six-year highs, supported by production issues at some Australian coal mines and relentless demand from Asian buyers. Rains in Indonesia are further tightening supply.


Japanese fixed-price settlement talks are still at a stalemate, three months after the April 1 deadline. Sources said if no agreement is reached this week, the so-called reference price could be rendered redundant.


In petrochemicals, China has notified producers in South Korea, Taiwan, and the US of its final antidumping duty rates for styrene monomer imports. Duties on cargoes from South Korea and Taiwan have been lowered, while higher rates have been imposed on cargoes from the US. The decision comes amid an escalating trade war between China and the US. Around 9% of China’s total styrene imports in 2017 came from the US.


Still on the China-US trade war, this time in metals, sources say the potential 25% China tariff on US coking coal could lead to defaults on recent trades. The tariffs have yet to be confirmed, but market participants expect it to be imposed in July, shortly after the US tariffs on Chinese goods are due to take effect on July 6.


So, for our social media question this week: Do you expect the China-US trade war to escalate even further? Join our conversations on Twitter with the hashtag PlattsMM.


And finally, in shipping market participants will gather in Beijing for the Enmore Oil Tankers Conference Tuesday, a key event in the global maritime calendar that will provide some direction on the demand-supply outlook for the rest of the year.


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





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