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Five key charts to watch in global commodities this week

 

Five Key Charts,

Asia was the main focus for the markets to start the final week of the first quarter, with nickel trading set to make a comeback after an extended hiatus. Another important event – ​​a meeting between the leaders of Brazil and China – was postponed after Brazilian President Luiz Inacio Lula da Silva became ill. Here are five notable charts to keep an eye on in the global commodity markets.

Out

Nickel trading is set to resume during Asian market hours on the London Metal Exchange on Monday, after being halted for more than a year. Since last March, trading has been taking place only during European hours, with average daily volumes falling to less than half of pre-crisis levels – and well below the five-year average – while the number of open contracts has declined by more than a third. The drop in activity has left markets vulnerable to volatile volatility and raised questions about the continued viability of the LME, where benchmark prices for one of the world’s most important metals are set. Officials expect the return of Asian trading to help boost liquidity.

Graphic: Bloomberg

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Graphic: Bloomberg

Brazil-China trade

Lula canceled a trip to China on Saturday as he received treatment for influenza, potentially thwarting his plans to strengthen ties with Brazil’s biggest trading partner. The prospect of a closer relationship between Lula and President Xi Jinping was expected to help boost shipments of soybeans, beef and other commodities. Meanwhile, soybean crushers are still trying to finalize negotiations to export the meal to the Asian nation, while Brazil also hopes to consolidate its position as a reliable and stable corn source. A growing partnership between China and Brazil threatens to displace US farmers in one of their key corn markets – and the South American nation looks set to surpass the US as the top exporter this year.

Graphic: Mint

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Graphic: o2help

natural gas

The end of winter in the Northern Hemisphere has left natural gas traders with little upside in the near term. Heating and power-generation fuel prices have halved this year to trade around $2 per million British thermal unit, as unusually mild temperatures led to an increase in inventories relative to normal levels for this time of year. But the longer-term picture is shaping up to be a completely different story. Gas for delivery in the summer of 2025 and 2026 have both seen their premiums rise for this year’s contracts, with prices hovering around $4 per mmBtu. It comes as new liquefied natural gas export projects, including Venture Global LNG Inc’s Plaquemines terminal, are expected to begin operations in late 2024 and boost demand for the commodity.

Graphic: Mint

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Graphic: o2help

electric vehicles

Global passenger electric vehicle sales are set to set a new record in 2023, according to BloombergNEF. While growth may be slower than in previous years, adoption in the US is set for a breakout year thanks to improved manufacturing efficiencies and new federal tax credits under the Inflation Reduction Act. The Treasury Department is expected later this week to release requirements for consumers to qualify for up to $7,500 in credits, including standards for batteries and critical minerals that would encourage North American production and supply from China. are to be cut.

Graphic: Mint

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Graphic: o2help

corn

Traders are betting on corn ahead of a possible planting report from the US Department of Agriculture on Friday. The closely tracked ratio between December corn and November soybean futures has been favoring corn plantings since earlier this month, meaning a comparatively strong showing will prompt more farmers to plant the grain at the expense of beans . That’s because top producer Brazil is reaping a record soy crop, while corn supplies at the No. 1 producer were cut short by drought last year.

Graphic: Mint

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