Curious about the latest trends shaping global commodity markets? Dive into our latest Global Energy Alert report, where we explore China's potential gasoline demand peak and its impact on the oil industry. Discover why escalating tensions in the Middle East haven't shaken freight rates, and uncover the drivers behind the resurgence of U.S. uranium production. Plus, learn why China is imposing export controls on antimony, a crucial element in photovoltaic solar cells and ammunition.
This complimentary report is part of our weekly Global Energy Alert subscription. Subscribers receive first-hand access to geopolitical insights, commodity news, and vetted stock picks from our expert analysts and traders.
Don't miss out-start your risk-free 30-day trial of Global Energy Alert today and see if the service is right for you.
- China's gasoline consumption might become the next challenge for the country's embattled oil industry as strong summer driving activity has failed to trigger the usual seasonal spike in the price of the transportation fuel.
- According to Bloomberg, gasoline receipts at the country's two main retailers, PetroChina and Sinopec, have dropped more than 5% since the start of July as rapidly expanding hybrid and electric cars curbed the upside for gasoline consumption.
- Higher train utilization rates have also become a challenge for gasoline as the rail network carried 6% more passengers this summer as it did last year, with overwhelmingly EV-configured ride-hailing firms like Didi rubbing salt into the wounds of gasoline-focused refiners.
- The International Energy Agency has cut China's oil demand growth from 410,000 b/d in last month's report to a mere 300,000 b/d in 2024, citing a slowdown in construction and manufacturing.
- Escalating tensions across the Middle East, with some industry watchers still awaiting an Iranian response to the Tehran assassination of Hamas leader Ismail Haniyeh, have failed to lift freight markets from their slumber.
- The Cape of Good Hope has by now become the default route for shippers seeking to deliver Asian goods to Europe and vice versa, prompting a change in how goods are delivered with Middle Eastern diesel now shipper aboard supergiant VLCC tankers.
- Clean freight rates from the Gulf to Europe have dipped to their lowest this year, slightly above the 5-year average at $53 per metric tonne, as relatively ample stocks of middle distillates and gasoline lowered buying interest from European buyers.
- Since the first Houthi attack in mid-October 2023, the Yemeni militias have attacked a total of 116 tankers, with the highest activity seen in June when a total of 54 attacks were carried out on commercial and military vessels.
- Mexico's national oil company Pemex has struck a deal with oilfield services company CME Oil and Gas to revive its Bacab and Lum fields, part of the giant Ku-Maloob-Zaap cluster that has been in terminal decline for years.
- Even though Pemex has been notoriously bad with paying back debts to suppliers (last reported at $5.6 billion in October 2023), its recent initiative to revive shallow-water drilling would cost it some $1.65 billion over the next 15 years.
- Pemex's crude and condensate production dipped to 1.745 million b/d in the most recent output data published by CNH, with crude-only production being the lowest in 40 years at 1.475 million b/d.
- Pemex has posted a Q2 loss of $14 billion, compared to a slight profit from a year earlier, marking the steepest quarterly loss since the first quarter of 2020, despite Brent averaging $84.94 per barrel in the March-June period.
- US uranium production is set to start growing again after years of decline and underinvestment, with output in Q1 2024 already surpassing all domestic production last year at 82,000 lb.
- The 2023 production of US uranium represented only 0.4% of the radioactive fuel requirements of the country, prompting operators to buy 51.6 million pounds of U3O8 at a weighted-average price of $43.80/lb.
- There are currently 54 nuclear power plants operating in the United States, with the most recent one being commissioned this year in Georgia (Vogtle), however, uranium production was often overlooked due to a decade of low prices.
- With uranium prices trending above the $80/lb threshold throughout this year, leading uranium miner Energy Fuels has started production from three mines across the US in Arizona and Utah, potentially bringing two mines in Colorado and Wyoming online next year.
- China has placed antimony, a metal widely used in photovoltaic solar cells and ammunition (infrared missiles and night vision goggles), on its export restriction list, creating an environment conducive to a continuous price rally.
- Beijing accounts for almost half of global antimony production and has been the largest producer globally with last year's output coming in at 83,000 metric tonnes, with the export restrictions tightening antimony markets by an estimated 10,000 mt.
- Antimony prices have been soaring since the beginning of this year, doubling since January to $22,000 per metric tonne in recent trading sessions, however, the restrictions (effective from September 15) will most probably push prices even higher to $30,000/mt.
- Western importers of Chinese-produced antimony have been preparing for such a scenario, with Europe seeking to source more from Tajikistan and Vietnam, whilst US buyers have been focusing on higher supplies from India.
- Singapore's metal stockpiles have been booming lately, with the past 12 months seeing a massive inflow of refined zinc and lead as traders pre-position their industrial metals awaiting the return of normal Chinese demand.
- Combined inventories in the London Metal Exchange's Singapore-registered warehouses grew more than tenfold since May 2023 to an all-time high of 430,000 metric tonnes in recent weeks.
- Partly the Singapore metal build-up has stemmed from the proliferation of rent-sharing agreements with the warehouses themselves, when half of the storage costs are shared by the storer to attract traders.
- Excessive storing by Trafigura and Glencore in Singapore could trigger regional discrepancies in zinc and lead prices as a significant portion of metal supply has been placed in the Asian markets, limiting supply in the Atlantic Basin.
- Merely a couple of days after US President Joe Biden doubled the volume of solar cells that American buyers are allowed to buy tariff-free, the country's solar panel producers have asked the Commerce Department to consider imposing retroactive duties on them.
- Solar panel imports from Vietnam and Thailand have been surging lately, rising 39% and 17% respectively in Q2 compared to the first quarter, with US solar panel producers alleging they've been benefiting from Chinese subsidies.
- Four Southeast Asian countries (Vietnam, Thailand, Malaysia, and Cambodia) collectively accounted for 80% of US imports last year, with Vietnam - a country denominated a non-market economy by Washington - taking the largest chunk out of the four.
- Vietnam's estimated spread between domestic and export prices of solar panels stood at 270%, more than triple Thailand's assumed dumping margins, making retroactive tariffs very likely.
That's it for this week's Numbers Report. Thanks for reading, and we'll see you next week.