Further OPEC+ Supply Increases To Come

Finally, next week is a fairly busy week for data releases. The EIA will be releasing its Short Term Energy Outlook on Tuesday, which will include US production forecasts. This will be followed by OPEC’s monthly market report on Thursday and the IEA’s monthly oil market report.


Prices of all major metals fell sharply yesterday, with LME copper falling more than 3.5% to close at US$9788/t (lowest close since April), with USD strength weighing on the complex. Further weakness in Chinese copper premiums will also have not done much to help sentiment. The Yangshan copper premium stood at around US$28/t yesterday, compared to US$43/t in early May, highlighting the limited buying interest in this higher price environment. 

The latest data from Peru’s energy and mining ministry showed that production of copper and zinc fell in April; however, year-to-date output remained above 2020 levels. Copper production fell 5.3% MoM to 173kt in April, while cumulative output over the first four months of the year increased 10% YoY to a total of 704kt. For zinc, output declined 3.7% MoM in April, while YTD production grew by 41% YoY. In Chile, state-owned Codelco produced 132.7kt of copper in April, down 0.5% YoY, while output at BHP’s Escondida mine came in at 85.7kt over the month, down 16.5% YoY. As a result, total copper production in Chile fell 5.6% MoM and 2% YoY to 461.2kt in April.


India has brought forward its 20% ethanol blending target to April 2023 from an initial target of April 2025. The measure is aimed to support clean energy, reduce reliance on imported crude and support the agriculture sector in the country. With sugar cane a key feedstock for ethanol production in India, the measure should see the domestic sugar surplus shrink in the years ahead, and as a result, sugar exports should also slow. Therefore, in the longer term, this is a supportive development for the global sugar market.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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