Crude oil:
There was a potentially bearish development over the week-end that
could pressure prices on Monday. Iraq said it wanted to be exempt from any deal
by producer cartel OPEC to cut production to prop up the market.
Iraq’s deputy oil minister Fayadh al-Nema said, “We are not going
back in any way, not by OPEC not by anyone else.”
At last report, Iraq’s oil production stood at 4.774 million bpd,
with exports standing at 3.87 bpd. OPEC plans to reduce production to a range of
32.50 million to 33.0 million barrels per day, down from 33.39 million bpd in
September.
Based on this assessment, OPEC will have a hard time achieving its
planned cutbacks if OPEC-member Iraq didn’t participate in the program.
This issue can grow into a big problem that may even threaten the
entire deal. Because of this, we could see oil prices come under pressure in
Monday’s session.
Other potentially bearish factors for Monday include a jump in the
number of producing oil rigs and a drop in Japan’s crude imports.
According to Baker Hughes, U.S. oil rigs rose by 11 last week, the
first double-digit growth since August. This news affects the supply side of
the equation.
On the demand side, Japan’s crude imports fell 4.6 percent in
September from the same month a year earlier, to 3.27 million bpd, the Ministry
of Finance said on Monday.
Nickel:
Global nickel market ended in deficit of 75,100 tonnes in
January-August 2016 with apparent demand exceeding production.
Production
World Nickel mine production was 1,355.8 kt in January-August
2016, lower by 75.1 kt when compared with the corresponding period during
previous year. The ban on exports by Indonesian administration has led to
reduced mine output from the country. In addition, the local mine production
from the country has continued to remain extremely weak ever since the
beginning of 2014.
Refined Nickel production in Jan-August ’16 was 1,183 kt. The
Chinese smelter/refinery production during the initial eight-month period of
the year witnessed decline of 40.6 kt compared to 2015. The total
smelter/refinery production of Nickel was 152.9 kt in August 2016.
Demand
Refined Nickel consumption during Jan-August ’16 surged higher
by 106 kt when matched with the previous year. Nickel smelter consumption was
152.8 kt in August this year.
Zinc:
The worldwide zinc market has recorded deficit during January to
August this year. This is after recording a surplus during the entire year
2015.
As per WBMS data, the global zinc market recorded marginal
deficit of 29 kt during the initial eight months of the year from January to
August. It should be noted that the worldwide zinc market had reported a
surplus of 100 kt during the entire year 2015.
Global refined zinc production witnessed decline of
2.3% during the initial eight-month period of 2016. The Chinese production of
locally refined zinc dropped marginally by nearly 0.7% when compared with 2015.
The global demand for the metal witnessed jump of 4 kt
when matched with January to August in 2015. The Chinese apparent demand
totaled 4,351 kt and accounted for over 48% of the global total. The Japanese
demand for the metal tumbled by 9% when matched with the levels recorded during
Jan-August ’15. The demand during the eight -month period totaled 297 kt.
The reported stock of the metal has declined by 25,000 tonnes
during the initial eight months of the year. Also, LME zinc stocks rose by
19,900 tonnes during the month of August and accounted for 43% of the global
stock of the metal. The LME stock levels at the end of August this year were
11.6 kt lower when matched with end-2015 levels.
The Chinese zinc metal imports, mostly special high grade zinc
increased during Jan-August ’16 to 334 kt when compared with the imports during
the same period last year. The imports of metal by China increased marginally
to 25 kt during the month of August this year.
The zinc slab production during August ’16 totaled 1,215.4 kt
and the consumption totaled 1,156.4 kt.
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