OPEC+ Struggles To Come To An Agreement

Turning to industrial metals, the weaker dollar has been a driving force behind the strength that we have seen across markets. LME nickel led the way, with the metal rallying more than 4%, and hitting an intraday high of US$17,520/t, after reports of an earthquake in Indonesia, raising supply concerns. This strength has continued in trading today.

Finally, turning to China, inventories of major industrial metals have started to build ahead of Chinese New Year. Total aluminum social inventories have gained 58kt since Christmas; while reportable refined zinc inventories at major cities increased by 7.5kt; although refined lead stocks were down slightly, by around 1kt. However, for now, markets do not appear to be focusing on these stock builds, instead of strong macro tailwinds remain the key driver.


Soybeans have continued their bull run, with the CBOT March contract trading well above US$13/bu, on the back of tightening supply prospects from Latin America, along with robust Chinese demand. Both Argentina and Brazil continue to witness dry and hot weather this year, which could impact crop yield and production later in the year. The ongoing strike by the grains inspectors’ union in Argentina combined with a weaker USD has also been supportive for soybean prices.

Turning to sugar and ICE No 11 sugar prices have been trading firm, with prices briefly trading above USc16/lb yesterday, levels last seen back in 2017. This strength comes despite the latest data from the Indian Sugar Mills Association (ISMA) showing that India’s sugar production increased 42% YoY to 11.05mt over the first three months of the season that started on 1 October. India is likely to see a strong sugar crop this year, on the back of larger acreage and improved yields. Indian sugar is likely to make its way onto the world market, given the domestic surplus, and thanks to the export subsidy announced by the government late last year.

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